Brian Jenkins: Will my hon. Friend give a cast-iron assurance that when it comes to maintaining small schools—rural schools, in many cases—he will not necessarily swayed by the views of parents, but will take a stance on what constitutes the best solution for the children? Multi-age classes are not always the best solution. They may make it possible for a school to be maintained, but the outcome is not good. Will my hon. Friend give that assurance that he will put children first?

Tim Loughton: The right hon. Lady's boss, the Secretary of State, has made a considerable personal investment in the plight of disabled children, but last year the number of children living in poverty after housing costs were taken into account rose by 200,000. We now have a higher proportion of children being brought up in workless households than any European country, and they stay in poverty for longer. Given the disproportionate effect on disabled children, who are twice as likely to live in poverty and twice as likely to leave school with no qualifications compared to their peers, thus reinforcing the cycle of generational underachievement, is not the Minister embarrassed by the Government's lack of a truly joined-up approach to disabled children and poverty involving employment, education, transport, health and housing—or is this just another case of so what?

John Robertson: My hon. Friend will be aware that bullying, because of new technology, now involves the internet and mobile phones. Sometimes, advertising such things makes the situation worse, as can be seen in some schools. What is my hon. Friend doing to try to solve the problem and what discussions has he had with service providers and schools to try to tackle that new kind of bullying?

Kevin Brennan: Yes. Unfortunately, the legacy of section 28 lives on to a certain extent in our system. I commend the hon. Gentleman for his work on equality as a pioneer in his party on the subject. He will be aware that we issued guidance on homophobic bullying last September. In fact, I know that my right hon. Friend the Secretary of State attended an event with Stonewall a month ago in relation to that.

David Chaytor: On the legacy of section 28, does my hon. Friend agree that homophobic bullying is not just a matter of victimising pupils who are gay or lesbian, but about the routine use of the terms "gay" and "lesbian" as forms of abuse? Does he recall that the Select Committee on Education and Skills report on bullying last year placed huge emphasis on the role of individual head teachers and governing bodies in establishing firm anti-bullying policies in schools? Will he incentivise efforts to stress the importance of that to head teachers and the chairs of their governing bodies?

Graham Brady: I am grateful to the Minister, who is my constituency neighbour and who knows my local schools well. She knows that I have four grammar schools and four non-selective high schools locally, all of which are excellent. Of the non-selective high schools, three have already been awarded an "outstanding" categorisation by Ofsted. The fourth—Blessed Thomas Holford Catholic college—is confident that it, too, will be found to be outstanding. It is keen to receive that categorisation as soon as possible, so that it can proceed with applications for a second specialist status. I think that it will take comfort from the Minister's words, and I would be grateful for any support that she can give.

Edward Balls: The hon. Gentleman is right in his figures: about 60 per cent. of parents in his area got their first choice, and 90 per cent. got one of their preferences. I agree with him—in the end, the only way to deliver fairness for all parents is to make sure that every school is a good school. If we do not do so, we will always have some schools that are over-subscribed. I know that in his area, there are three single-sex faith schools that are particularly over-subscribed. That is why I hope that he will back my national challenge programme, which seeks to reduce to zero the number of schools where fewer than 30 per cent. of pupils get five good GCSEs including English and maths. In 1997, that was the case in more than half of all schools—more than 1,600. We have got that number down from 1,600 to 638, and our pledge is to get it down to zero. I would like his support in making that happen.

Edward Balls: I am happy to have that meeting with my hon. Friend and the Minister for Schools and Learners. The situation in Slough is quite concerning; the numbers there are substantially out of line with those in comparable authorities in the south-east. The number of pupils getting their highest preference was 38 per cent. in Slough, compared with an average of 79.5 per cent. in the south-east. As I look at the list of numbers in front of me, Slough seems to be at pretty much half the level of every other area in the south-east. Clearly, that is not acceptable. We need to see what is happening and whether the schooling system or the local authority are not getting it right. We are happy to meet with my hon. Friend and see what we can do to help.

Desmond Swayne: I look forward to reading the three written statements. The Secretary of State has said that by defending A-levels, one is committed to excellence for only a few. Is he seriously telling us that after 11 years of Labour Governments, only a few are capable of taking on A-level study?

Beverley Hughes: Yes, I can. Leaving aside the gender stereotype and the fact that we want more men in those professions, I agree with my hon. Friend on his question and the points that he makes. To be serious for a moment, it is very dispiriting when we constantly have sniping and undermining of Sure Start by the Conservatives. As the national evaluation has recently shown, Sure Start is making a real difference, which is why we on this side of the House will reject any proposals to cut outreach workers—a policy that would undermine Sure Start and hit the poorest families most. Yet again, the Tories' sums do not add up. They are saying—

Edward Balls: It was the right thing to do, and I make no apology whatsoever. Last week, we set out the good news that 80 per cent. of parents—indeed, more than last year—are getting their first choice of school. That is good news, not bad news, and I am very proud of what has been achieved in that respect. It was also the case, as I said in my statement last week, that we did an internal piece of work that showed that while the vast majority of maintained schools and academies were compliant with the code, a significant minority, which are disproportionately voluntary aided and foundation schools, were non-compliant. The advice that I received, which I took, was that we should verify the data before making them public school by school, but I felt that it was right that if I was verifying that information around the country, I should also make it clear and public what we were doing, and that is what I did. Just to give one example—

Edward Balls: Not at all. The fact is that voluntary contributions for security or other purposes are entirely legal under the code. What is not allowed is to ask for contributions as a condition of application to schools. The hon. Gentleman should be careful about jumping to conclusions; he should wait for the detailed data that we will publish. The reason why the faith organisations—I could quote the Board of Deputies, the Catholic Education Service or the Church of England—today supported publicly what we are doing is because they know that the credibility of the admissions codes depends on dealing with these issues.
	Mr. Speaker, may I please give you one example of an e-mail I received from a parent? She said that she was applying to a school where the application
	"requires parents to state their occupation, sign a form agreeing to give permission to claim Gift Aid...and complete a standing order. The fees chargeable are stated in the prospectus as £37.50 per month. This must be submitted along with the application form to the school. Before I submit any of this information I would like to know if I am legally obligated to do so."
	The answer is that she is not obliged to sign a form saying that she will pay £37 a month before applying to a school—

Jim Knight: I will make a written statement to the House tomorrow on the take-up of diplomas in the second consortia. Alongside that second consortia, in relation to which there has been good take-up, we will continue our communications campaign. In my constituency, there has been full take-up of the construction and built environment diploma as a result of the radio advertising going on locally and throughout the land. We will continue to try to get the message out to parents, but for a brand new qualification, it will always be a challenge to get people to understand what we are suggesting. Roughly, the process will involve the equivalent of three days' curriculum time. and we expect to see people taking GCSE English and maths at level 2 alongside the diplomas.

David Laws: Last month, the Department confirmed that in the past year it has carried out investigations into two of its contracts with private sector contractors. One of those investigations has led to a referral to the police. Will the Minister tell us what the allegations were, which private sector contractors were involved, and what the outcome of the investigations was?

Andrew MacKinlay: This morning, the Secretary of State for Children, Schools and Families and the Secretary of State for Culture, Media and Sport announced £5 million for music and dance at GCSE and A-level. Will my right hon. Friend ensure positive discrimination in allocating those scarce resources to the most disadvantaged schools, rather than middle-class schools, which have all the gravitational pull of the high expectations of parents, pupils and teachers? Will he ensure that we act as a socialist Government and allocate the money to the poorest and most disadvantaged in our community?

Gordon Brown: With permission, Mr. Speaker, I would like to make a statement about the European Council held in Brussels, which I attended with the Foreign Secretary on 13 and 14 March.
	I begin with the most important concern that the Council addressed: the need to ensure that, faced with global financial turbulence and what the Council identified as a deteriorating global economic outlook, high global oil and commodity prices and volatility in exchange rates, we continue to do all we can, with co-ordinated action at European and global level, to maintain stability and growth.
	All European member states agreed to measures for greater financial market transparency: first, prompt and full disclosure of exposures to structured products and off balance sheet activities; secondly, more rigour in credit ratings; thirdly, improvements in valuation standards, particularly for illiquid assets; and fourthly, a strengthening of risk management under the capital requirements directive.
	Given the globally transmitted nature of the risks, it is clear that many of those recommendations—the changes to credit rating agency operations and assessments; risk management and disclosure by global financial institutions; changes to capital adequacy rules; and arrangements for valuing financial instruments—which have also been proposed as measures for change by the American Administration, can best be implemented at a global level.
	And in welcoming that international dialogue as the first step in reform, I can tell the House that the Chancellor of the Exchequer is today writing to the G7, the International Monetary Fund and the Financial Stability Forum to call for agreements on co-ordinated international action on transparency and disclosure, better risk management and action on credit rating agencies to be agreed when the G7 and the IMF meet from 10 to 12 April.
	In line with the approach of other major central banks, the Bank of England has this morning announced a further £5 billion liquidity support to financial institutions. And a new group has been set up to improve liquidity in the mortgage market.
	At the European Council I made it clear that, while our economy is resilient and fundamentally strong, we will at all times remain vigilant and, especially at this time of global uncertainty, continue to take whatever action is necessary to maintain economic stability and growth.
	The Council also discussed a new approach to the rising number and economic power of sovereign wealth funds. I strongly welcome the conclusions. Sovereign wealth funds are now worth $2 trillion, but may soon potentially be worth $10 trillion. Our new approach—calling for a voluntary code of conduct based on best practice, openness, transparency and corporate governance—is one that will enable funds to show that they are commercial in their operations.
	The Council also discussed food and energy price inflation, and agreed further steps to monitor worldwide inflationary pressures. We agreed that the current global financial turbulence was not a reason to postpone fundamental economic reforms that are essential to building a more competitive European economy. We agreed that we now press ahead with the liberalisation of markets and with new investment in knowledge and innovation. That includes further liberalisation in the energy, post and telecoms markets, which could generate up to 360,000 new jobs.
	We discussed the need also for an economic reform strategy that looks beyond Lisbon—a comprehensive strategy to improve the business environment, strengthen relations with China and India, put our creative and knowledge industries at the forefront of the world economy, and make European universities leading global players, in particular through increasing their contacts with business. So the next stage of the Lisbon agenda will include a review of human capital and skills in Europe, and a renewed focus on competition policy in the single market.
	The second major issue discussed by the Council was climate change, where it is essential that we achieve our ambition of a comprehensive post 2012 agreement to reduce greenhouse gas emissions and of Europe leading the world in a low-carbon economy.
	In December, the European united front at the climate change negotiations in Bali played an important part in the historic breakthrough that agreed the need to make large cuts in emissions and achieve a new climate deal within two years. Only a common European approach—a Europe with Britain not at the margins but at the centre, leading the world—can ensure a global low-carbon economy founded on our proposal of a global carbon market.
	Building on this commitment, the Council agreed an ambitious schedule for adopting a package of measures to cut emissions by 20 per cent. by 2020 or by 30 per cent. as part of an international agreement. The Council also agreed with the UK on the need for an effective EU emissions trading scheme to provide the incentives to drive carbon reductions in the most cost-effective way and for a cap on emissions set centrally, with a clear emissions reductions trajectory to give investors the predictability that they now need.
	The Council also considered a report from the EU high representative on the security implications of climate change and, at our request, agreed to submit recommendations on follow-up action—including intensifying co-operation with countries outside Europe—by the end of the year.
	Meeting the EU's climate change targets requires not just action to reduce carbon emissions from energy suppliers and industry, but incentives to change individual behaviour. The Council will now invite the Commission, in bringing forward its legislative proposals on VAT rates, due in the summer, and working with member states, to examine areas where economic instruments, including VAT rates, can play a role in increasing the use of energy-efficient goods and energy-saving materials, from, as the UK has proposed, insulation and household materials to energy-efficient electrical goods, where VAT is cut.
	The Council also agreed on the importance of achieving a fully functioning and joined-up internal energy market, as an essential condition for the secure, sustainable and competitive supply of energy across Europe. We also committed to an energy agreement by June this year. It is clear that energy security is strengthened by a policy that takes a collective approach to third-country producers, notably Russia.
	Europe can also play a part in ensuring stability beyond its borders. The Council agreed to build on existing co-operation to establish a "Union for the Mediterranean", to promote security and stability in the wider region and to provide a framework for co-operation between the EU27 and other Mediterranean coastal states on political and security issues, as well as economic, social and cultural affairs. That new union will be launched during the French presidency in July this year.
	We also agreed that international development issues and the achievement of the millennium development goals, as well as Europe's continuing leadership as the biggest contributor of aid in the world, will be the subject of a major discussion at the European Council in June.
	The outcome of the Council and the preparations that are being made for June affirm the conclusions of the debate that we have had in the House over the past nine weeks: they demonstrate that, with the completion of the Lisbon treaty, we now have an opportunity to move beyond institutional issues to create a more outward-looking, flexible and global Europe, and to address the challenges that matter most to the citizens of Europe.
	With three quarters of a million businesses, 3.5 million jobs and 60 per cent. of British trade dependent on our relationship with Europe, we should do nothing to put the stability of that relationship at risk. It is only by working constructively and remaining fully engaged with our European partners that we properly address the challenges ahead.
	As we prepare for the European Council in June and the French presidency later this year, our aim is that European countries working together can lead the way on climate change, on security, on international development and on the response to global financial turbulence. I will be discussing with President Sarkozy when he visits Britain next week how we can take all these challenges forward during the French presidency. I commend this statement to the House.

David Cameron: I welcome the focus of this Council: global competitiveness, global poverty and global climate change. This is the right agenda. On climate change, the first thing that Governments should do is get their own house in order. The draft communiqué included specific targets to reduce energy use in Government buildings, offices and cars. Will the Prime Minister explain why those specific targets were removed from the final text agreed at the weekend? Looking at our own record here in the UK, does the Prime Minister accept that 14 Government Departments are less energy-efficient than they were eight years ago, and that 15 Government Departments have actually increased their carbon emissions during that time— [ Interruption. ] He asks what this has got to do with Europe. I think we should be leading by example. In a similar context, will he confirm that, despite the fine words in the Budget about plastic bags, the Government have bought 1.2 million Whitehall-branded single-use plastic bags in the past two years?
	The Prime Minister is right to say that the success of the emissions trading scheme is vital. Will he acknowledge, however, that the Lisbon treaty is completely irrelevant to making that happen? There are six words on climate change in the treaty and, as the House of Lords Committee pointed out last week, they have no legal significance. Is it not the case that we do not need a new constitution or a new treaty to deal with climate change at EU level?
	Everyone will welcome the Prime Minister's intention to use indirect taxes, including VAT, as incentives for green behaviour. That is something that we have put forward in our own quality of life policy group report. The Commission said that it had doubts about whether the proposal was workable. One EU diplomat said that the agreed wording was
	"a polite way of saying no",
	and
	"a way of saving face".
	In regard to the outcome that we all want, is the Prime Minister sure that he is right and that that EU diplomat was wrong?
	On the economy, Ministers discussed the recent turbulence in the financial markets. Clearly, proper co-ordination by central banks is going to be essential. Will the Prime Minister guarantee that his approach of putting the Financial Services Authority, rather than the Bank of England, in the lead to rescue British banks in distress will not make the process more difficult?
	The final communiqué from Brussels warns Governments across Europe about the dangers of high deficits. Will the Prime Minister confirm that Spain's budget is in balance, and that Germany, the Netherlands, Denmark and Sweden all have budget surpluses, while Britain has the largest budget deficit in western Europe? Does he now regret the fact that we are the one country that failed to prepare for the downturn by putting money aside in the good years?
	The other main issue for Europe to focus on is global poverty and the urgent need to make rapid progress on the Doha round. Will the Prime Minister tell us why the EU seems to be showing so little urgency in getting the deal moving again? The Commissioner in charge of those negotiations is Peter Mandelson. Whatever any of us may think of him, I have always had very helpful briefing from him on trade and, I have to say, on other issues, too— [ Laughter. ] The Leader of the House should not laugh; she might put herself in jeopardy. What matters is that there should be a clear decision on whether he is going to serve another term. It cannot be in anyone's interests for the Commissioner's future to be the subject of endless speculation. Will the Prime Minister tell us today whether Peter Mandelson is going to go on doing his job, or whether this decision is to be the subject of further dithering?
	While Ministers were in Brussels, there was violence— [ Interruption. ] Look, I thought the boot boy had been told to calm down. I read in a Sunday newspaper that he was actually the soon-to-get-the-boot boy. Soon, he might have to go and sit in another part of the House. I see that the Prime Minister is laughing. I think your career—you will be on the same conveyor belt as the Leader of the House.
	While Ministers were meeting in Brussels, there was violence on the streets of Tibet. An EU statement on Tibet has been issued today, which I am sure the whole House will welcome. Britain rightly works closely with China and we very much welcome the way it has opened up its economy, but is it not vital that the Chinese Government understand that with the greater role they play in the world comes greater responsibility? Does the Prime Minister agree that the strong relationship we all want with China requires us to be candid and frank, even on issues where we disagree?

Gordon Brown: I will deal with each point, but is it not remarkable when 3.5 million jobs are dependent on our membership of the European Union and when European co-operation on the environment was crucial to what happened at Bali that the right hon. Gentleman can say so little about the advantages of co-operation in Europe, and that he should spend his time attacking the European Union rather than seeing the benefits in it?
	The right hon. Gentleman says that the environment is nothing to do with the European reform treaty, but it is the first time we have set down as a strategic objective that the environment is an important issue and it is there in the treaty. All the other parties in Europe believe it is important that the environment be at the centre of Europe's work and if I may say so, if we are going to lead the world on the environment, we will need to co-operate with our other European partners.
	The right hon. Gentleman also raised the question of how we as a country are cutting emissions. We are one of the few countries meeting our Kyoto targets and we will continue to do so. One of the reasons why we are meeting them is that we implemented early on in our Government the climate change levy, which the Conservatives continue to oppose.
	As far as the economy is concerned, I find it very strange for the right hon. Gentleman to be raising issues that compare us with the rest of Europe in terms of economic progress. We have lower inflation than the rest of Europe and we have a history of stability and growth. The right hon. Gentleman will find, during the course of this year, that the American deficit will be higher than the British one because people are taking the right action to deal with the global financial turbulence. I am sorry that the right hon. Gentleman has so little to say in support of the action that the European Union and, indeed, all international authorities are taking on the economic issues confronting them. If the Conservatives want to be a serious party, perhaps they could actually address the serious issues of economic progress.
	As far as the issues about Tibet are concerned, the right hon. Gentleman is absolutely right that, while it was not discussed at the European Council, all of us are concerned about what is happening there. We have made our views known to the Chinese authority: we believe that there should be restraint and an end to violence; and we believe that there should be a dialogue between the different authorities, which should happen soon. It is very important to recognise that at this time the whole world is looking to China to see what the reaction will be.
	The right hon. Gentleman also raised the issue of trade and may I say that we, too, have been pushing the rest of the world because we believe it important to use this window of opportunity to get a trade deal? That is why we are working as we are with the European Trade Commissioner and why it is essential to move other countries forward to see if we can get a deal.
	One of the people who was at the European Council during the course of the weekend was the Czech Prime Minister. Until recently, he was the Conservative party's only supporter in Europe. What he is saying now, however, is that failure to support the reform treaty will leave the Czechoslovakian people isolated in Europe. That is exactly what would happen to this country if we ever listened to Conservative advice.

Nicholas Clegg: I am grateful to the Prime Minister for his statement. As European summits go, the conclusions were workmanlike, largely welcome, but fairly unremarkable. I wonder whether that is in part because of the issues that were omitted. Notwithstanding the Prime Minister's words about Tibet today, will he explain why there was no discussion among EU Heads of State last week on Tibet? Does he not think that it is precisely the actions of the Chinese authorities in Tibet that should be the subject of discussion between European leaders?
	I know that the Prime Minister is extraordinarily reluctant to do anything, it seems, to annoy the authorities in Beijing, but will he none the less confirm today that he will follow the lead of President George Bush and of Chancellor Angela Merkel and meet the Dalai Lama on his forthcoming visit to London to express solidarity with the Tibetan people?  [Interruption.] As the Prime Minister knows, I have written to him about that on two occasions and still not had a clear answer— [Interruption.]

Gordon Brown: I am grateful to the right hon. Gentleman. First, may I correct him on VAT? I first raised the issue months ago with our European colleagues; I have been following it up ever since. I am grateful that we now have an agreement to look in detail at whether VAT reductions on matters such as household materials and electrical goods can be beneficial both in encouraging people to use energy-efficient products and in stimulating a market where Europe can benefit in the future. So, he is wrong to say that this was raised only on the day of the Council. We have been pressing our European colleagues on the matter for some time.
	I agree with the right hon. Gentleman on the importance that we attach to environmental issues. Again, I have to correct him. Carbon capture and storage is something that we have been pushing right across the EU. There will be 12 demonstration plants, and one of them, we believe, will be in the UK, but we want the European Commission to make it possible for there to be greater incentives so that people will develop carbon capture and storage at a quicker rate.
	The right hon. Gentleman is right about energy liberalisation and the importance that we attach to it in the EU. That is one of the reasons why qualified majority voting in energy matters will benefit the opening up of markets and the creation of jobs, although it was opposed by the Conservative party.
	I disagree with the right hon. Gentleman about Britain's record in relation to other countries. I repeat that we are one of the few countries in the world that is meeting its Kyoto targets, and we will continue to do so.
	On the economy, I hope that the right hon. Gentleman will agree that Europe is leading the way on calling for a proper international response. We had a meeting with Chancellor Merkel, President Sarkozy, Mr. Prodi and the President of the European Commission a few weeks ago. We have now put forward proposals in detail. The Chancellor is writing to all members of the IMF, the G7 and the Financial Stability Forum to push these forward. Our proposals are in harmony with those that have just been put forward by the US Treasury Secretary. To ensure confidence in financial markets, we believe that it is important that those proposals are adopted.
	Finally, I agree with the right hon. Gentleman when he says that action to express our views on Tibet is important. People around the world are expressing concern. We have made our views known, and there will be an EU statement later today. There is a demand for restraint on the part of the Chinese authorities. These are the most important matters now. We will make other announcements and decisions in due course.

Nigel Griffiths: Will my right hon. Friend accept that it was important that he achieved success on getting the Council to consider a reduction in VAT on insulation materials? Will he go further and press the Heads of Government in Europe not only to achieve the target of a 60 per cent. reduction in CO2 emissions by 2050, but to go beyond that towards 80 per cent.?

Peter Tapsell: While we are on the subject of European co-operation, did the Prime Minister ask the other 26 Heads of Government at the European Council why none of them are prepared to send fighting troops to support our Army in the Helmand province of Afghanistan?

Gordon Brown: There was a discussion about energy security and relationships with Russia, which is indeed a serious matter. Although it should not prevent us from trying to secure a partnership agreement with Russia, we should be absolutely clear about where our strategic interests lie, and there is merit in Europe coming together to present a united front in this regard.
	The right hon. Gentleman is also right to say that we would be in danger of not being able to make progress on the environment or on other issues if we were again to become isolated in Europe. I repeat that not one other country proposes a referendum on the European Union treaty—[Hon. Members: "Ireland!"]—apart from Ireland, and not one Government of the 27 opposes the treaty, while this Conservative party in this House opposes it. I understand that the only parties that support the Conservative position on the referendum are the Dutch party for the Animals, the French Hunting, Fishing, Nature, Tradition party, Sinn Fein, and a variety of Trotskyists. Moreover, the Prime Minister of the Czech Republic—I repeat, the Czech Republic—made it absolutely clear not only that he would be isolated in Europe if he opposed the treaty, but that he was totally against the Conservative position on a referendum. In other words, the Conservatives have no allies in Europe.

Tony Baldry: The promise of a discussion of the millennium development goals at the June Council sounds somewhat weak. Will the Prime Minister undertake that between now and June, UKREP—the United Kingdom Representative Office—and No. 10 will work with colleagues elsewhere in the EU to try to ensure that at the June Council meeting a process is put in place to implement the MDGs by 2015—that there is not just further discussion, but that some decisions are made about a process to implement them by then?

Phyllis Starkey: I beg to move,
	That leave be given to bring in a Bill to make provision for the licensing of nail bars and premises where tattooing, cosmetic piercing and other prescribed treatments are carried out; and for connected purposes.
	A constituent of mine first drew my attention to nail bars and the potential problems posed by what one might describe as the bargain-basement end of the market. My constituent, who runs a reputable nail bar in central Milton Keynes, became very concerned by the damage that had been done to the nails of some of her customers by other, less reputable establishments. Since I first raised this issue in the House on 15 November 2007, I have received feedback from across the UK showing that this is a widespread problem—a point reflected in the wide geographical spread of the sponsors of this Bill.
	It might help Members who are not familiar with the nail bar business if I briefly describe what nail bars are and the procedures they use. Nail bars are a relatively recent import from the US. They are a part of the beauty industry, and offer artificial nail extensions that can then be painted or decorated. In reputable nail bars with properly qualified nail technicians, nail extensions are created from mixing a polymer powder with a polymerising agent called ethyl methacrylate, or EMA. The resulting nail extension is flexible and easily attached to the natural nail. Unfortunately, the expansion of nail bars has led to a rise in the number using unqualified technicians and using an alternative polymerising agent called methyl methacrylate, or MMA. The agent is banned in nail bars in the United States, Australia and New Zealand, but there is no such ban in this country. The attractions of MMA to the operative is that it is much cheaper than EMA, at between a third and a sixth of the price, and that it forms the extensions more quickly, enabling non-standard nail bars to undercut the prices of the more reputable businesses.
	The customer might not be aware until it is too late that MMA has serious disadvantages, however. The nail extension is much more rigid and does not adhere well to the natural nail, so the natural nail has to be drilled or etched with an electric file to help adhesion. Unlike EMA, MMA polymers continue to polymerise once attached, and the MMA penetrates and damages the nail bed. Long-term use of MMA is associated with respiratory problems and serious allergic skin reactions, and the staff using it usually protect themselves, including from the dust generated by the electric filing, by wearing gloves and masks. That ought to suggest to the customer that the use of MMA is not risk free.
	The other consequence for the customer of using MMA is that the extensions are so rigid and so tightly stuck to the nail that if they get caught or jammed the natural nail can be ripped off. Pain is caused by the drilling, and the permanent ridging and damage to the natural nail and nail bed can take a long time to grow out. To compound matters, MMA extensions are much more difficult to remove than those formed with EMA.  [Interruption.] I can see that I am catching the attention of the hon. Member for Putney (Justine Greening). Several of the nail bar technicians who have contacted me have shown me graphic pictures of the damage that MMA has caused to the nails of patrons of sub-standard nail bars.
	One way to deal with the problem is to improve awareness among the public, particularly young girls and women, of the damage caused by MMA and the importance of ensuring that, before anyone tampers with their nails, they check that the person is properly qualified. I know of one scheme that is to be launched shortly, which will allow potential customers to check a website for reputable nail bars in their area. I very much welcome that, but simply improving public awareness will not stop the continued spread of non-standard nail bars. Such bars not only risk affecting their customers but undercut the credibility of the whole sector and those who try to provide a high-quality service.
	London councils within the M25 already have the power under part II of the London Local Authorities Act 1991—"Special treatment premises"—to license nail bars, and thus in principle to impose standards, including the appropriate level of qualification for staff and restrictions on the chemicals that can be used. However, the contacts that I have had suggest that even in London, where licensing powers exist, council licensing officers may be focusing on hygiene—that is important, because hepatitis C can be spread through the use of electric drills on nails—and may not be aware of the specific risks of MMA or of the need to check the qualifications of staff.
	Outside London, the situation is even more confused. Nail bars do not come within the scope of the Local Government (Miscellaneous Provisions) Act 1982, and therefore cannot be subject to licensing. Environmental health staff can give advice on the use of chemicals, but their only enforcement powers come through the Health and Safety at Work etc. Act 1974, which is relevant to employees, not to customers. Trading standards can respond to customer complaints, but most customers do not realise that the pain and damage that they experience because of MMA are not just a normal part of the process.
	Although the problem of MMA seems well known in the industry, it seems to be below the radar of public authorities. In response to earlier comments that I have made in the House, the Department of Health has told me that it has made no assessment of the public health risk of MMA in nail bars, and the Health Protection Agency has no record of ill effects to customers or employees in the last three years. The HSE's health and safety laboratory is apparently reviewing health issues for technicians in nail bars, but it seems that, once again, the effect on the customer is being ignored—perhaps because damaged nail beds are not regarded as a terribly serious public health issue.
	That is not satisfactory. Most of the customers of non-standard nail bars are likely to be young women and girls on low incomes, for whom the low prices that those businesses can charge make nail extensions seem much more accessible. Customers need to be protected from unscrupulous operators, which is why I propose that the powers already enjoyed by London councils to license nail bars and a number of other similar businesses should be extended to all local authorities across England.
	The chief environmental health officer at my local council in Milton Keynes tells me that following an inspection tattooists, for example, like to have a document from the local authority as it drives the cowboy operators out of business. It helps to bring in customers if businesses can advertise that they are registered with the local authority. Among qualified nail technicians, there is also strong support for regulation. At present, an astonishing 85 per cent. of nail technicians do not have NVQ level 3 qualifications, and have no incentive to invest in the training as it gives them no competitive advantage.
	A proper licensing regime across England would protect customers, drive up standards and reward those businesses investing in training. It would mean that girls and young women could use nail bars and be confident that they would suffer no ill-effects.
	 Question put and agreed to.
	Bill ordered to be brought in by Dr. Phyllis Starkey, Ms Celia Barlow, Mr. Clive Betts, Dr. Roberta Blackman-Woods, Richard Burden, Ms Sally Keeble, Fiona Mactaggart, Chris McCafferty, Kerry McCarthy, Martin Salter, Anne Snelgrove and Margaret Moran.

(1) That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance.
	(2) This Resolution does not extend to the making of any amendment with respect to value added tax so as to provide—
	(a) for zero-rating or exempting a supply, acquisition or importation,
	(b) for refunding an amount of tax,
	(c) for any relief, other than a relief that—
	(i) so far as it is applicable to goods, applies to goods of every description, and
	(ii) so far as it is applicable to services, applies to services of every description. —[Mr. Darling.]
	 Question again proposed.

Hilary Benn: It will depend on the decision that the Government take about the use of international credits. As the hon. Gentleman will be aware, the Bill provides for the committee on climate change to give us advice on the use of international credits. The Government will have to look at that advice in due course, when we receive it. In another place, there was a lively debate about the use of international credits, and we will no doubt have such a debate in the House when the Bill comes before us. As I am sure the hon. Gentleman accepts, it is entirely legitimate to make progress partly by using international credits because in the end, from the world's point of view, it does not matter where emissions are saved, as long as they are saved. That is why the Government's view is that carbon trading and the purchase of credit have an important role to play.
	Some 40 per cent. of emissions are the result of choices that we make as individuals, so the Government want to help people to make low-carbon choices, and to ensure that our homes and products are working towards low-carbon living. That is why we launched a big public awareness campaign last year to encourage people to act on CO2. I saw that campaign working for myself in Leeds last Friday. The online carbon calculator has already been visited by about 800,000 people. It is practical and simple; it helps us as individuals to understand what our own carbon emissions are, and gives practical ideas on how to reduce our carbon footprint.
	Through the carbon emissions reduction target we have obliged energy companies to double the amount of energy-saving measures that they install in people's homes from this April, which means that they will reach up to 8 million households. That will help to save 4 million tonnes of CO2 a year by 2011, and deliver a typical saving of £90 on fuel bills. The green homes service, which is to be launched next month, will provide people with comprehensive advice on how they can reduce their carbon footprint, and will connect people with the offers that are available from energy companies and with other support. We will put £26 million into that service.
	We will become the first country in Europe to phase out high-energy light bulbs. That is to be completed by 2011 and will save up to 5 million tonnes of CO2 a year that would otherwise be produced through UK electricity generation. We have introduced regulations to improve the energy efficiency of new homes. Today's buildings are 40 per cent. more energy efficient than those built before 2002, and 70 per cent. more efficient than those built before 1990. In under a decade, all new homes will be zero-carbon. We will set out the definition of a zero-carbon home for the purposes of the 2016 target by the end of 2008, following a consultation in the summer. The Government are determined to enable business and the public sector to play their part in a low-carbon Britain.

Hilary Benn: I am indeed aware of that. I was referring to European Union countries building demonstration projects in the EU, and I said that we are the only EU country doing that in the EU. As the hon. Gentleman knows, we are also funding, alongside other countries, the near zero-emissions coal demonstration project—NZEC—in China. We have to demonstrate that post-combustion CCS works because we have to fit it in all existing coal-fired power stations and in those built during the months and years ahead because of the thirst for energy in developing countries.

Hilary Benn: That is the case, as I just acknowledged, because of the substantial increase in the prices that energy companies charge and that consumers have to pay. That is why my right hon. Friend the Chancellor announced in the Budget his wish for energy companies' expenditure on helping vulnerable customers through their social programmes to increase. It is also why he drew attention to the fact that customers who use pre-payment meters typically pay around £55 more on their energy bills than those who use standard credit and £144 more than those who pay by direct debt.

Hilary Benn: I will happily tell my hon. Friend what my view and the Government's view is. We think it is now time to tackle the issue and we are looking to Ofgem and the suppliers to bring forward proposals for treating pre-payment meter customers more fairly. However—this is the answer to his question—if sufficient progress is not made by next winter, the Government are prepared to use statutory powers to reduce the differential between pre-payment and other forms of payment.
	In the meantime, as my hon. Friend and the House will be aware, we are providing immediate help to pensioners who face pressures from higher energy bills this year, by raising the winter fuel payment for the over 60s from £200 to £250 and for the over 80s from £300 to £400. Some 9 million pensioner households will be better off as a result. I simply remind the House that before 1997, there was no winter fuel payment at all.

Hilary Benn: I am going to bring my remarks to a conclusion, as I have been very generous in giving way.
	One the reasons today's debate is welcome is that it gives us the chance to discuss the change that is to come. In the rest of this century, debating and deciding on our carbon budget will be as important as doing so on traditional financial budgets, and arguably even more so. The measures that I have set out in my speech have shown the practical steps that the Government are taking to enable the country to reduce its carbon emissions. It is for that reason that we have a strong record on the environment; but I also recognise, as does the House, that we will all need to do more to help build a low-carbon Britain. The Budget shows exactly how and why we are determined to do that.

Peter Ainsworth: I have to take issue with the Secretary of State's final sentence. He barely spoke about the Budget in his remarks and the Budget hardly deals with the pressing environment challenges that we face at all. On the other hand, I do not doubt for a moment his integrity and sincerity on such matters. My hon. Friend the Member for Bexhill and Battle (Gregory Barker) and I heard him speak at the Chemistry Club last week. He gave a passionate and committed speech about the environment and the importance of living within natural limits, which is a lesson that the whole of humanity has to learn. He said:
	"We are living beyond our means",
	which is true in respect of the environment, but unfortunately it is true of the Chancellor, too, in respect of the economy. That is one of the dilemmas that we face.
	The Budget was supposed to be the great green Budget. The headline in  The Guardian on 10 March ran "Darling plans greenest budget yet". We expected it, we wanted it and we were all prepared for it. Indeed, the Chancellor warmed us up for it last December, when he said:
	"Sustainability will be at the heart of the next Budget. This is not an optional extra, it is essential to all our futures."
	In his Budget speech, the Chancellor cranked up the excitement further, saying:
	"our greatest obligation to the future must be to tackle climate change."—[ Official Report, 12 March 2008; Vol. 473, c. 295.]
	I agree, so I was looking forward to the greenest Budget yet. We needed the greenest Budget yet, because carbon pollution in this country is higher than it was in 1997. On that most fundamental of measures, the Government have failed.
	To say that I was disappointed by the Budget is a huge understatement, but I was not alone in being disappointed. The director of Friends of the Earth said:
	"He has merely tinkered at the edges",
	Continuing,
	"the overall package falls a long way short of what is required. We urgently need real political leadership on this issue".
	The executive director of Greenpeace said:
	"His measures have failed to match the scale of the challenge we face".
	Perhaps the headline from the Green Alliance summed it up best: "Green Budget? What Green Budget?"
	I am happy to take as my text for this debate the press release issued by the Department for Environment, Food and Rural Affairs on Budget day. It is headed "Benn welcomes Budget 2008" and sets out the Department's response to the measures announced by the Chancellor last Wednesday. I suspect that it was issued through gritted teeth. The opening paragraph of the press release appears to be have been drafted before the Department knew what was in the Budget, and reads:
	"The Chancellor today set out the 2008 Budget which includes measures to tackle climate change, the most serious and pressing environmental challenge the world faces. Setting out new policies to reduce emissions across all major sectors of the economy, this Budget will ensure the UK continues to lead the climate change agenda internationally while the government continues to take action to protect the UK's natural environment."
	There are no policies in the Budget to
	"reduce emissions across all major sectors of the economy".
	Or, if there are, I would be grateful if the Secretary of State could tell us what they are. If there had been any, he might have been able to tell us by how much he expected carbon emissions to be reduced as a result of the Budget measures, but he was unable to do so.
	The next paragraph of the press release has a faltering tone and conveys a sense of putting on a brave face. It states:
	"Following the Budget statement, Hilary Benn said: 'This Budget demonstrates how seriously the Government takes the environment, with clear incentives for action, for example the new vehicle excise duty bands and charges for plastic bags, and measures to reduce emissions, for example zero carbon new commercial buildings.'"
	I shall say more in a moment on the new vehicle excise duty bands, charges for plastic bags, and zero-carbon new commercial buildings, but let us first reflect on that list of highlights. It reveals just how pathetic the Chancellor's measures are in response to
	"the most serious and pressing environmental challenge the world faces".
	It contains only a car tax, a charge on plastic bags—maybe—and a promise to do something about commercial property in 2019.
	Let us move on from the headlines to the nitty-gritty, such as it is. Most of it comprises familiar, heated-up re-announcements, or has been borrowed by Conservative party policy—we are always pleased when the Government do that—or will merely have a marginal impact on climate change. The press release continues:
	"The Green finance measures in the Budget include: Laying the ground work for the introduction of five-year carbon budgets".
	That is an achievement not of the Budget, but of the Climate Change Bill, which was introduced only after a concerted campaign by green groups, the Conservative party, and other Opposition parties. We support the Climate Change Bill, and I am pleased to say that those in another place have introduced some important amendments, which I trust the Government will not seek to overturn when the Bill comes to our House.
	A report entitled "UK greenhouse gas emissions: measurement and reporting", published by the National Audit Office at the weekend, has thrown some worrying light on the way in which the Government measure the carbon that we produce. It seems that we might be using dodgy data. The NAO report raises profound questions about the credibility of the Government's approach to reducing carbon emissions, which threatens to send its climate change strategy off course. If the measurement of carbon and other greenhouse gases is flawed, the whole process of setting targets for cutting emissions is undermined.
	To make matters worse, there has been an extraordinary degree of ambiguity about the targets that the Government have set themselves. They repeatedly boast that the one target that they have met is the unambitious Kyoto target, but even that is now being called into question. It all depends on the system of measurement used. It is unclear whether the confusion is accidental or whether there has been a deliberate attempt to create wriggle room. The Lib Dem spokesman was right to draw attention to this earlier, and to point out that, on one basis of measurement, we have not reduced our greenhouse gas emissions at all since 1990. The existence of two quite separate carbon accounting systems would do credit to Enron.
	There is an urgent need to rationalise the reporting system, so as to make it coherent and consistent. The NAO report reveals not only that different Government Departments use different methods to measure their carbon emissions, but that it is possible, within Departments, for two separate systems to be used to make different points.
	It is all very well for the Chancellor to announce in the Budget that next year will see the establishment of the first carbon Budget, but he might also have pointed out that there is at present no true or fair means of validating it.

Peter Ainsworth: We have supported the banding, and I have said that we support the principle that if we are to have green taxation, it should apply at the point of choice, not retrospectively. So, if I have understood the hon. Gentleman's question correctly, I think the answer is yes. However, the important caveat that we have made clear is that any revenues from additional green taxes should not just disappear into the Exchequer, but should be used to cut taxation on families and on other things that help society and help to make the country a better place.
	I believe that people, by and large, are genuinely anxious about climate change and keen to be part of the solution. A responsible Government would provide leadership and encouragement, not use the cover of eco-taxation simply to raise funds because they have been spending beyond their means. Cynicism of that kind is deeply damaging to the green cause.
	The next announcement is the plan to support auctioning 100 per cent. of allowances for large electricity producers in phase 3 of the EU emissions trading scheme. We support that; in fact, we have been calling for it for quite a while. But what do the Government intend to do with the proceeds of the auction, which are likely to run into billions of pounds? Will they be earmarked for investment in green technologies or simply be pocketed by the Chancellor? Perhaps a Treasury Minister will answer that question now, or, if they prefer, when they speak later in the debate. Later, then.
	Next is the setting up of the new green homes service. I say that it is new, but we had already heard about it last year—from the Secretary of State, I think, and from the Prime Minister himself. The £26 million allocated to the green homes service, spread across the country, would mean each household receiving £1-worth of advice on how to green their home. Is there not already advice available on a multitude of websites and from a multitude of Government-sponsored agencies and supported organisations, from the Energy Saving Trust to Warm Front and Warm Zone, which I had the pleasure of visiting up in Newcastle at the weekend.
	Then we have this:
	"Incentivising only the most sustainable biofuels, by shifting support away from the duty differential to the Renewable Transport Fuel Obligation in future years".
	As the Secretary of State knows, there is absolutely no benefit to the task of dealing with climate change if renewable fuels are grown at the expense of the rain forest.
	We on the Conservative Benches have a serious objection to the renewable transport fuel obligation in its current form because we believe that there is a real danger that it will do more harm than good—damaging some of the most important and fragile habitats on the planet, endangering already-threatened species such as the orang-utan and enhancing the risk of food shortages.
	DEFRA's own chief scientist has warned that
	"the way we are currently producing biofuels is not the way to go".
	The implication in the Budget that axing the duty differential on biofuels and placing all our hopes on the renewable transport fuel obligation will solve our problems altogether is naive or even deceitful. The truth is that, by cutting the duty differential, the Chancellor will save some £550 million in 2010-11. It has nothing to do with the environment and everything to do with the fact that the Chancellor is living beyond his means.
	Here is the next item in this sad litany:
	"Increasing climate change levy rates in line with inflation".
	That is okay, as far as it goes, but the truth is that the climate change levy does not do the job—it does not do what it says on the tin. It does not even live up to its own name. It is a tax on industry's use of energy, and a largely ineffective one as well. We have been saying that for some time.
	Only the other week, the Select Committee on Environmental Audit found that the climate change levy has had
	"relatively little effect on business emissions".
	The way in which the Prime Minister clings to the climate change levy as if it is some kind of lifeline to save his green credentials is increasingly pathetic and desperate.
	Next is the re-announcement of aviation duty to replace air passenger duty. That is not new, but I have no problem with the measure since it was a Conservative proposal in the first place. Then there is
	"an ambition for all new non-domestic buildings to be zero carbon from 2019".
	I applaud that ambition. However, there is a yawning chasm between the Government's ambitious rhetoric and the reality of delivery. It will take a Conservative Government to ensure that that particular ambition is turned into a reality.
	Next there is
	"extending the Stamp Duty Land Tax exemption from zero carbon homes to new flats, retrospectively from 1 October 2007".
	There is some extending to do here, because by the end of 2007, the number of homes throughout the country claiming zero stamp duty on the basis of being zero-carbon was six.
	The final item in DEFRA's highlights of Labour's greenest Budget yet is an increase in the aggregates levy from 1 April 2009, which is unexceptional. However, slipped in before the news about that levy is:
	"Government legislation and the imposition of charges if retailers do not take voluntary action to eliminate single-use carrier bags".
	That was the thing that was designed to grab the headlines and to act as a smokescreen to cover the rest of a limp, half-hearted, piecemeal, unambitious and disappointing set of rehashed and boring announcements.
	The DEFRA press release does not tell the whole story, however. This eye-catching initiative proposes the possibility of legislation if "sufficient progress" to reduce the use of plastic bags is not made voluntarily. What do the Government mean by "sufficient progress"? Is it a reduction from the present number of plastic bags—about 13 billion—to 12 billion, to 10 billion, or to 5 billion? We have no idea what "sufficient progress" is. Industry has no idea. How can the Government expect it to deliver voluntarily when it is not being told what it is expected to deliver? The DEFRA press release talks about action "to eliminate" the use of plastic bags. It is up to the Government to clarify the target for which the industry should be aiming voluntarily to avoid legislation. The big highlight of Labour's greenest Budget yet was a vague threat about plastic bags, which has nothing to do with the Budget or the Chancellor anyway. This was a serious missed opportunity.
	While I accept, and welcome the fact, that there are hopeful signs that Ministers are executing a U-turn on our proposal to introduce electricity feed-in tariffs, which could transform the economics of renewable energy in this country and create a huge number of new jobs, where are the green individual savings accounts to encourage people to invest in technologies that will help to combat climate change? Where is the plan for a new market exchange for environmentally responsible companies? Where is the proposal for an effective replacement for the climate change levy that can play a proper part in helping to price carbon across the economy? Where is there any sign that the Government recognise the need to create incentives to capture and use waste heat from power generation? Where is the vision? Where are the ideas that will propel Britain to the forefront of the huge commercial opportunity for low carbon growth that is opening up across the world? That opportunity is being exploited by France, Germany, Japan and the United States, but Britain is being left behind. The answer is not in this Budget and not in this Government.
	We have an environment Department that cannot even control its own budget. When it is not cutting support for environmental schemes, it spends its time losing arguments with other Departments. We have a Government who are tinkering at the margins, fiddling about with unpopular stealth taxes, and failing either to deliver properly joined-up policies on climate change, or to protect the environment.
	Faced with our greatest obligation to future generations and the most serious and pressing challenge that the world faces, it is pathetic to wag a finger at plastic bags while simultaneously waving through plans to build a new generation of coal-fired power stations without carbon capture and storage. It is pathetic to scowl at people with Mondeos and people carriers while simultaneously ushering in a huge increase in aviation capacity. It is a betrayal of trust to dress up stealth taxes as green taxes and it does not fool anyone. This was a pathetic, boring and unambitious Budget from a Government who have run out of ideas, run out of money, and overstayed their welcome.

Alan Simpson: I would normally try to make my contribution to the Budget debate on the day on which the Chancellor delivered his statement, but unfortunately I was laid low by a bug from which I am still struggling to recover. If I think that I have had a difficult week, however, it must be said that the world outside has had a dramatically catastrophic week in comparison with mine.
	Perhaps it will prove helpful to me to make my speech today rather than last week, as I had planned. It is certainly nice to be able to do so on a day on which my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs is present. He is very kind in putting up with being pestered by me on climate change issues. I hope he will forgive me if I add to that today, and pester him as though he were Chancellor for the day. I do not think it sufficient for us to hold the Government to account on climate change issues. We must recognise that we face a challenge from an unholy trinity: climate change, peak oil and market meltdown.
	This bad week for me has been a wretched week for Bear Stearns, the fifth-largest United States investment bank. Last year its shares were trading at $176 each; over the weekend it was sold for $2 a share, and the markets are saying that they see no end to the prospects of meltdown. The Fed has intervened, and for the first time since the great depression has extended its lending rights to companies that are not banks or investment banks. Such is the level of concern about the extent to which conventional money markets have been creating funny money and a bubble economy that is now bursting all around us, and shows no sign of coming to an immediate end. It seems to me that we cannot have this Budget debate without seeking to engage with the fact that we may have to think about systems failure on a global scale, and about what the United Kingdom must do to manage what is within our grasp in the context of that failure.

Alan Simpson: Sadly, that is precisely what I am saying. We are going back to the days of the south sea bubble, when money in the private sector could be created without constraints on a scale that led the world in pursuit of follies for which we all paid a phenomenally high price. What makes the present position harder is the fact that it comes at the same time as other developments. Today oil hit a record price of $111.80 a barrel, from which it has just slipped back. The oil companies are beginning to say to us openly that the world will face an oil crunch by 2050. That means that they understand that the last four years, in which oil production has never really exceeded 85 million barrels per day, have nailed the lie that there are vast untapped reserves that will just cope with the burgeoning demands on oil from India and China and from developing nations. We live in an era of declining quantities of available oil and escalating oil prices, and even according to the oil industry's calculations, that will hit us by 2015. Furthermore, over the weekend scientists told us that glaciers were melting faster than even they predicted.
	The challenges of climate change, peak oil and economic meltdown redefine the parameters within which national Governments must construct their budgets. I think that it is time for us to be bold, and say that it is impossible to run conventional budgets in unconventional times. That requires us to think outside the box and to think in much more dynamic terms.
	It is right that hon. Members on both sides of the House have thrown into question the purpose of green taxation. If it is no more than a form of stealth taxation, we as politicians will kill the public support for green taxation. It has to be transparent that the purpose of green taxation is to change behaviour: it is not to fill the Chancellor's pockets, but to change the mechanisms through which the markets work in the United Kingdom, and the ethical basis on which those markets work. Perhaps it is a good time to cut out the Chancellor as the middleman in that process. Easy and available mechanisms are on offer to us today, if only we had the willingness and the vision to reach out beyond our shores, or beyond the Treasury mindset, to see how those might work.
	I want to focus on five aspects of the challenges that the Budget should have addressed and all future Budgets will have to address: energy security, food security, water management, sustainable transport and financial accountability. I begin with financial accountability. There are no easy solutions to paper over the mess that has been created within the international financial systems, but we should be saying that the UK will place two principal requirements on how our financial systems work. First, we should introduce legislation that says that directors will be made personally liable for anything not reported in their annual accounts. That would bring to an end the off balance sheet accounting and securitisation of assets that have allowed the creation of Mickey Mouse money on a colossal scale.

Alan Simpson: I would include the Government. In fact that was my second point. The second rule that I would bring in would say that no public contracts should go to any company that was registering its activities in an offshore tax haven. As an adjunct to that, it should be a precondition of all public sector contracts that they would not include any entitlement to shift the company or the assets offshore for the duration of the PFI contract. It seems that large numbers of contracts are shifted offshore to make them more tax-advantageous to the companies that have been getting them. It is wrong for us in government to preach one set of ethics if we practise another, so we should set that as our own requirement and set those preconditions for all other companies.
	Moving on from that, I want to look at ways in which we should as a Government and as a House be requiring markets to be the drivers of their own transformation. The best example of how to do that is in Germany and it is in the context of energy. Opposition Members and a number of Members on the Government Benches have tried over a number of years to get the Government to do precisely what the Secretary of State has now said they will do, which is to look at feed-in tariff legislation and the way in which it works in Germany. However, it is not enough to say that we will be looking at that. That system has a proven record of delivery. How it works is simple. Germany introduced market rules that gave citizens the right to supply clean energy. In addition, the Government placed a requirement on the energy sector, saying, "You will pay your customers four times the market rate on 20-year guarantee periods, reducing at 5 per cent. per year, for the clean energy that you supply in the system." Yes, other customers within the energy system have to pay for that. It worked out at an average of £12 to £14 per year per household energy bill.
	When I tried to raise that with Government civil servants in the Department for Business, Enterprise and Regulatory Reform, as usual they said, "It is an interventionist measure, which we do not support." I said to them, "You do support interventionist measures; it is just that you support only incompetent ones." We have the renewables obligation, climate change agreements, the climate change levy and commitments to carbon emissions trading. They all add costs to people's bills, amounting to £140 a year on the average household bill, for which we get one tenth of the carbon savings that people get in Germany for their £12 a year. This is not about market intervention; it is about shaking off the shackles of our own incompetent intervention. I hope that amendments—supported by Members of all parties—will be tabled to the Energy Bill that say at the very least, "Yes, by all means look at feed-in tariffs, but we should be under a statutory obligation to bring in a scheme of feed-in tariffs within one year of the passing of the Bill, and there should also be a commitment to extend that not only to electricity, but to gas." We must look into that; I know that the Secretary of State has looked into it in terms of his own Department.
	There are some rules that we must change. Green energy electricity suppliers have been queuing up in the UK for up to 10 years to get access to the system, but they cannot do so because the existing suppliers have first call on access to the system and the rules are that only if they cannot meet the energy demands of the day are new suppliers to be drawn in. Therefore, as Kingsnorth comes from an existing supplier, it will take precedence over a green energy supplier that has been in the queue to get access to the system for 10 years. We must give green energy suppliers preferential access to the system.
	In terms of renewable gas, we currently have problems with the disposal of wastes, and they will become even greater when the EU waste directive comes into effect in 2010. Germany, however, has been putting decayable waste not into landfill or incineration, but into anaerobic digesters. It therefore turns the waste into energy and puts the gas back into the system, and it does so at the locations—the communities, towns and villages—that the waste was collected from. The waste is used there in combined heat and power plants to deliver a local energy system. We cannot do that because our current system of renewables obligations applies only if the gas is converted into energy at the anaerobic digester plant, as a consequence of which there would be the huge cost of ducting heat for many miles, which would be utterly uneconomic. We need, therefore, to change the market rules for our energy systems.

Alan Simpson: I do agree, and I ought to say that I was the chair of a waste disposal company in Nottinghamshire that was responsible for the incinerator we have in Nottingham. At the time, we dramatically raised standards in filtering and emissions. I look back at that and think it was a half-good idea for the second half of the last century, but it is a hopeless idea for the beginning of this century. We ought not to be wasting a moment in going down that path now, when the true visionary steps take us outside such conventional boxes and into a different framework of thinking about, and delivering, sustainable energy from our own waste.
	I have a confession to make. Over just this past week I have come to realise that I have become a Brownite. My political conversion is to the beliefs of, unfortunately, Lester Brown, whose book, "Plan B: Rescuing a Planet under Stress and a Civilization in Trouble", sets out how we can transform our economy to deliver 80 per cent. carbon reductions by 2020. Achieving that, however, requires us to give industry the responsibility of being, and the incentive to become, the driver of its own transformation.
	Let me illustrate how that would work with transport. It is essential to say that we require something more than a raising of the vehicle excise duty on gas-guzzling vehicles, so what would be seen as transformational? Let us say that we extended the German energy model to our own approach to vehicles. The sensible approach would be to require the industry to impose a levy of, say, £3,000 on all gas-guzzling vehicles, but which can be paid as people transfer to the hybrid, low-carbon vehicles in a given manufacturer's own range. That way, our citizens face the prospect of a cash incentive to transfer to low-carbon impact modes of transport, rather than high-carbon, so it should be economically advantageous. For manufacturers who do not produce hybrid or low-carbon vehicles, the money should go into an industry-administered fund that pays for the retroconversion of vehicles to meet low-carbon emission standards. That way, the industry is made responsible for its own transformation.
	I should point out that in 1998, the Government reached an agreement with the motor manufacturing industry that by 2008, it would have reduced carbon emissions from 190 g per kilometre to 140 g. My understanding is that there is not a cat in hell's chance of its doing that. As someone who has been somewhat sceptical about voluntary agreements, I say, let us take this one at its word. Let us say, "Fine—there will also be a levy of £1,000 on every vehicle you sell that does not meet the 140 g per kilometre standard, and you keep that money in an industry fund to pay for conversion to low-carbon vehicles." People may say that that is somewhat draconian, but even if we wait for the oil industry's 2015 figure, we will face an oil price crunch that will lead to a crisis in terms of the unaffordability of the conventional ways in which we have tried to move around the country. We should anticipate this, live with it and engage with it. We should move towards transformational budgetary economics, rather than adopting the "steady as you go" approach, with the notion that, hopefully, someone else will dispose of the crisis for us.
	We could do exactly the same with aviation. It would be really helpful if we did not put all our eggs in the presumptive basket of the carbon emissions trading scheme, which is a Mickey Mouse idea at best. All the nations that have been in that scheme cheat, and so do we. At the end of the day, it is the scope for dishonesty that will sink the scheme. The truth is that it is those who act as middlemen in the financial system, and the largest polluting industries, that have really made the money out of emissions trading. Even if all the permits were auctioned, that would still prompt the question whether that money would go directly into funding behavioural changes that would transform our approach to sustainable economics. I do not think that it would.
	The simpler way, to pick up on a point made by the hon. Member for Altrincham and Sale, West (Mr. Brady) in a previous debate, is to say that not all aircraft are the same in terms of their carbon emitting standards, which is absolutely true. We could classify aircraft in the same way that we classify fridges. We could say to airports, "On the basis of your last year's journeys in and out, you will be allocated a carbon miles quota. Next year and for every year after that, that quota will reduce by 5 per cent., and it is up to you to work out how you manage the affordability and frequency of flights, the balance between long and short haul and the balance between passenger and freight. However, none of it escapes a direct and easily measurable quantum that establishes that the carbon mileage entitlement is being reduced by 5 per cent. per year. That is the way we have to go." Indeed, we could do exactly the same with shipping. That is a measurable, rather than speculative, approach to transforming the way in which the markets operate.
	My final point concerns food. One point that has emerged from the changes in oil prices in the past year is the realisation that the impact kicks in in our shopping trolleys far sooner than it does at the petrol station. We will be faced with real problems about how people can survive, not only in the eating part of everyday life but in the heating part. Henceforth, all Governments will be required to produce budgets that address their own food security needs. We must refocus on that responsibility, because of the extent to which the UK has walked away from it on a presumption that globalised food trade will always provide an answer from somewhere. Whether we put it down to climate change, peak oil or economic collapse, that ain't gonna happen any more.
	We need to relocalise our presumptions about food markets, in exactly the same way as other parts of Europe have maintained their strong, regionalised food systems. In many cases, they highlight the ecological virtue of those systems by pointing out where they lower carbon miles, reduce pollution and congestion, and strengthen the lines of food accountability from the local producer to the local consumer.
	In my constituency, a quiet, unassuming man who has just taken over the catering responsibilities for the combined Nottingham University Hospitals NHS Trust has saved the hospitals at least £1 million a year just by throwing out the processed food caterers and replacing them with local food contracts. If that can be done on a simple scale locally, it can be done on a national scale. We need to do it because tomorrow's economics will not be a continuation from today of business as usual. Ministers need to be willing to step up to the plate and be visionary and bold in setting out transformational programmes that will change the whole character of how we live. I know that the Secretary of State can do that; I just wish that he could get his colleagues to join him.

Steve Webb: That is right, and such examples expose the timidity of the 2019 goals for various measures in the Budget. If we have drive and vision, these things can be achieved much more quickly, sometimes by mandate, as with the gas switchover, and sometimes by incentives.
	I take the point made by the hon. Member for East Surrey about not using the cash from the VED change—the showroom tax—for other tax cuts, but my worry is that it stops. In other words, if I am thinking of buying a gas guzzling luxury car, even a VED of £900—as opposed to one of £400—is neither here nor there if it lasts for only one year. Why not persist with it? Given that the purchase is the critical decision, why not keep the VED at that rate for the lifetime of the vehicle? That would send a strong signal and it would encourage manufacturers to start thinking about the new cars that they put on sale. That might lead to a much quicker transformation in what is offered.
	The Secretary of State was right to point to the issue of best in class. There are very fuel efficient versions of almost every vehicle, be they rural 4x4s or family cars. It is not that people cannot have big family cars or 4x4s, but we need strong incentives for them to purchase the more fuel-efficient models. The incentive at the point of purchase would be much stronger if it were not a one-off hit, which is probably quite marginal to the cost of purchase.

Steve Webb: We certainly think that the increased VED should continue: it should not be a one-off hit. We also think that green tax, as broadly defined, should represent a significantly bigger share of the total tax take. As the hon. Member for East Surrey said, that should not be part of an overall tax increase, and green taxes should be used to cut other taxes. We have identified the standard rate of income tax that lower and middle earners pay.
	This Budget takes the green tax share to 2.8 per cent. Ten years ago, it was 3.6 per cent. The share of green taxes has therefore fallen by about a third in 10 years. The proposed taxes are by no means swingeing new green taxes: they will not even fractionally reverse the decline in the past 10 years. Given that we have to raise a certain amount in taxation, surely it is common sense to raise that on pollution and the marginal choices that increase carbon emissions, rather than on income and the things that we want people to do. The present balance is wrong, and I do not understand why the Government do not address that. I take the point made by the hon. Member for Nottingham, South that the risk is that the Government will totally discredit the notion of green taxation, which is one of the key levers we have at our disposal.
	How much green taxation was in the Budget? The Institute for Fiscal Studies says that by 2010 additional green taxation will be £1.8 billion a year. In the context of Treasury estimates of revenue, that is a rounding error. The Chancellor routinely revises his income and expenditure figures by far more than that every six months. The idea that the Budget contained some huge tax switch that will transform our battle against climate change is nonsense, and in his heart of hearts the Secretary of State knows that. The scale of what is proposed is simply not up to the scale of the problem.
	We have heard of the endless deferral—to 2019—on new buildings. The schools programme has a target of 2016. The Department for Children, Schools and Families is rebuilding schools up and down the land, so for another eight years new schools, which will presumably stand the test of time for decades, will be built to inadequate standards, locking in sub-standard carbon performance. That should be dramatically improved—and quickly.
	We have heard already about the small scale of the green homes service—£1 per household. The Secretary of State used to hold the same position at the Department for International Development. The British Government will clearly contribute worldwide to attempts to deal with the consequences of climate change, and we know that many of the poorest countries will be the first to suffer. Does he therefore share my view, and that of the leader of the Liberal Democrats, that our spending on alleviating the consequences of climate change should be additional to the 0.7 per cent. target and should not eat into it? Surely it would be a double penalty on the world's poorest people to say, "Actually, we were planning to spend money on clean water, education, disease protection and all those things, but we are not going to spend as much on them. Our actions of decades past are ruining your natural environment, so we will take a bit of the money that we were going to use to try to stop your children dying before the age of five to make sure that your earth doesn't flood." Surely, if 0.7 per cent. of GDP was a proper target for the humanitarian and infrastructure work that needs to be done anyway, the climate change mitigation work that we will do overseas should be additional. I hope that the Minister who responds to the debate will give us the Government's position on that.
	I want to say a few things about the energy efficiency and fuel poverty aspects of the Budget. I intervened on the Secretary of State and queried some of the cuts in his departmental budget. Obviously, when it comes to energy efficiency, we have another example of that, which is the freeze on the Warm Front programme. The people who perform the home installations reckon that compared with the previous three-year period they will soon be able to do fewer houses. The cost is going up and the budget has been frozen in cash terms.
	Warm Front is a highly impressive, highly effective programme. It is not without its flaws, but it is an excellent scheme. I am therefore concerned that cuts have been made. When we ask Ministers about that, they cite other schemes and initiatives, such as the carbon emissions reduction target—CERT—but that is not an adequate substitute. It is not as good, for a number of reasons. For example, it rewards a company for saving carbon emissions among its customers. However, a company gets a better return from saving carbon emissions for a big, wealthy customer with high carbon emissions than it does for a small consumer—perhaps a single pensioner living on their own. In other words, for a given amount of insulation, companies get more return by going for, in some cases, the more prosperous.
	I know that there are minimum quotas, but they have gone down, too. I understand that the number who have to be in the target groups has gone from 50 per cent. to 40 per cent. and that the target groups have been broadened, which is crazy. We want the priority to be the fuel poor. The Government know who the fuel poor are, broadly defined—they certainly know who receives means-tested benefits. Companies in the CERT programme do not know which of their customers are on means-tested benefits, so they have to spend time, effort and money finding out or speculating about that, when the Department for Work and Pensions knows.
	I hope that the Secretary of State's Department— [ Interruption. ] The Minister for the Environment says it is because of data protection. I quite understand that the Department for Work and Pensions cannot simply hand over benefit details, but why, for example, could not every recipient of pension credit receive a certificate, once a year, with their annual uprating statement? They used to get certificated housing benefit, entitling them to a rent rebate and to have their council tax paid. Why should they not receive a certificate of eligibility for Warm Front or CERT, or for whatever scheme happens to be running, that they take to their supplier? The supplier would not have to know which benefit they were on or what their income was. No databases would have to change hands. It is a relatively simple idea. The mailing is going out anyway. I am reassured that the Secretary of State is reaching for his fountain pen, and if it happens, I am happy to share the glory with him.

Harry Cohen: I want to speak about the Budget overall, but I shall start by giving my pennyworth on the environmental issues. First, I agree with the Secretary of State that the main tool the Government have is not the Budget but the Climate Change Bill, and I therefore look to him and the Government to agree to including much stronger carbon emission targets in the Bill.
	Secondly, I welcome the 10 per cent. increase in air travel tax in the Budget; it is now the plane that is taxed, rather than the passenger, but we have to do more than that because air travel is a key source of carbon emissions, and we need to get a grip on the issue. The Government cannot increase the size of every airport, either. They have to curtail airport expansion as part of a proper climate change policy.
	My third point is on traffic congestion. Again, the Chancellor was right to put a tax on the gas-guzzlers—the high-carbon vehicles—but the Government need to be more courageous on price, including petrol price, and on public transport. I know that there has been a big increase in public transport, and I welcome that, but more needs to be done. More investment is needed in green public transport; that is where the emphasis should be. We need to move away faster from oil-based fuels.
	On energy efficiency, the priority must be that which the Government set in their early years in power—helping vulnerable people in their homes. We must go back to that target. I shall say a bit more about that in the main part of my speech. We should encourage combined heat and power schemes, the use of solar panels and microgeneration in new homes, and there should be lots of incentives for people to use those technologies in existing homes, too. We also need promotions encouraging people, in a sensible way, to use less energy. That is an important point, and we could start with public offices, where the lights are burned all day and night, unreasonably. They could set an example.
	The final point I want to make in what I hope is a succinct summary of green issues concerns renewables. The emphasis has to be on renewables; I think that they are a national priority. They should be considered to be in the national interest, including when there are objections to them. Of course we will still need to give the issues proper hearings, but national interest should be a factor in decisions relating to renewables.
	I now turn to my main comments on last week's Budget. The TUC called it
	"a sensible Budget for the overall economy, but something of a missed opportunity to make real progress to a fairer society",
	and I agree with that assessment. When the Chancellor was interviewed on the radio the morning after the Budget, he said:
	"We are where we are".
	I now think of it as the "We are where we are" Budget. That was really an admission that he did not have a great deal of room for manoeuvre in the circumstances. Those circumstances include a possible world recession owing to the crises in the American finance and mortgage markets and very high oil prices. Maintaining economic stability in the UK in the face of that is essential, so it was a holding Budget, and in many ways I understand why.
	However, when we consider where we are, we have to take into account the wasteful cost of the wars, including the war in Iraq, which contributed to high oil prices, and the unwise handouts given to private companies so that they can encroach on public services. That includes the almost £2 billion for the London underground that was wasted on Metronet. There has also been no proper check on the speculation by finance capitalists that engendered the current downturn. The horse has now bolted, but I still think there need to be controls on the credit and profits with which those finance capitalists can speculate.
	To come back to the point about encroaching privatisation in the public sector, I would say that there is a heavy cost attached to private finance initiatives. There was a report in  The Guardian online—I read it in my Library research fact sheet—headed "PFIs move offshore". It says:
	"Billions of pounds of private finance initiative...including the refurbished Treasury headquarters in Whitehall and the new Home Office, have been moved off-shore by their City owners to avoid paying tax on their profits.
	More than 50 PFI schemes have now been included in portfolios held in Channel Islands tax havens by three major PFI investment companies, HSBC Infrastructure, 3i Infrastructure and Babcock and Brown Public Partnerships"—
	not Prime Minister Brown, I presume. The article continues:
	"Once the buildings have been completed, up to 90 per cent. of the ownership of the UK-registered company running the PFI is transferred to the companies which are based in the tax havens. This means that the income and profits from running the PFIs will be free of UK tax for up to 40 years, depending on the duration of the PFI."
	If the people concerned are not to pay tax, that is a scandal that the Government must get to grips with. In addition, extortionate, exorbitant amounts are charged for any changes to PFI contracts, as was pointed out in a recent National Audit Office report. Millions are being charged. The contracts are not even being tendered; they go straight to the existing PFI contractor, and that has implications for the green agenda, because in time we will want to change the buildings concerned and make them more green-sensitive. The PFI contract owners will have us over a barrel and will charge what they like. The Treasury has to look at that aspect of PFI.
	I started with the issue of fairness and I return to it now. I support a non-dom tax on the super-rich who turn up to make profits out of Britain without living here. Such a tax is reasonable. However, the Chancellor said that he would look to close the loopholes. I have been in the House a long time and I have heard that said in virtually every Budget. As the TUC points out, big companies and the super-rich use plenty of loopholes to avoid paying their proper taxes.
	I refer the House to the booklet "The Missing Billions: the UK Tax Gap", which was written by the accountancy and tax specialist Richard Murphy. He looked at 50 top companies and says that their effective corporation tax rate is 22.5 per cent., not the 30 per cent. agreed by Parliament. He says:
	"The fifty largest companies almost always pay 5 per cent. less tax on average than they declare in their accounts."
	He goes on to say that in the seven years to 2006, those companies' effective tax rate fell by 0.5 per cent. each year. The leaflet shows how super-rich individuals avoid paying their fair share of tax and that £3.2 billion is lost by turning earned income into investment income, which is taxed more favourably, or by shifting the income to others, such as spouses, in lower or nil tax bands. Another £3.8 billion is lost because transactions are moved out of the UK; £0.5 billion is lost by turning income into a capital gain and £4.8 billion is lost from various kinds of tax planning.
	The leaflet says that half the amount lost to tax avoidance could raise the level at which the higher rate tax starts being paid by £10,000 a year. That would offer significant help to those on middle incomes. The same amount could increase the state pension by 20 per cent., reduce income tax by 3p in the pound or build an extra 50 hospitals a year. Half the amount lost to tax avoidance could do one of those things. The leaflet goes on to call, as does the TUC, for the introduction of a new "general anti-avoidance principle" to make it easier to tax the super-rich and the large corporations. I certainly support that.
	We have had a debate on energy companies, and I welcome the Secretary of State's response to my intervention about pre-payment meters; I note that there is an iron fist in the glove on that issue. I certainly hope that there will be a requirement for energy companies to help vulnerable groups. Bearing in mind their high charges and high profits, those companies got off lightly in this Budget. One in six—more than 4 million—households in this country suffers from fuel poverty, and I am told that that number is going in the wrong direction.
	I turn back to the issue of the rich getting richer. The Fair Pay Network has produced an interesting report that points out that half of poor British children live in a working household. The report states:
	"Pay rates at the top of the labour market have become obscene. 54 billionaires who are based in Britain are estimated to have paid just £15 million in tax last year, on earnings of some £126 billion. Some 4,000 City employees were awarded bonuses of £1 million or more—and most will have found some way to shelter their riches from the 40 per cent. tax rate that should apply to them. YET: 1&frac12; million children in poverty belong to households that pay full Council Tax."
	The Government are right to use work as a way out of poverty, but
	"57 per cent. of poor households are working households, up from under a half (47 per cent.) a decade ago."
	The report also states that
	"the public sector remains the largest employer of low-paid workers aged 25 or over...64 per cent. of low-paid workers in Britain are women...Poverty in the UK has a female face, and we have the largest gender pay gap in the EU...a woman in Britain has a 14 per cent. higher chance of being in poverty than a man."
	It then makes the point that I mentioned earlier:
	"the total number of poor children in working households has stayed exactly the same in the last 10 years: 1.4 million."
	That record is not good enough for a progressive Labour Government.
	Before I come to how taxes are spent, I should say that I support the increases for boozers and smokers, as there are good health reasons behind them. However, progressive measures should not necessarily—or solely—be paid for through taxes on boozers and smokers. Those who have got millions in City bonuses should be paying a fairer share.
	There is much to be praised in the Budget: I like the £200 million in the next three years towards achieving the target that no school should have fewer than 30 per cent. of its pupils getting five A* to C grades at GCSE. That is a good measure that will help schools in my constituency of Leyton and Wanstead. I also welcome the boost to pensioner households from the rise in the winter fuel allowance. Furthermore, the pension credit rises to a guaranteed £124 for a single pensioner and £189 for a pensioner couple, and 6,000 pensioners are being taken out of income tax.
	However, Age Concern's parliamentary briefing is worth reporting to the House. It states:
	"there are still 1.8 million older people (17 per cent.) living in poverty in the UK...The Government have a target to end fuel poverty for all vulnerable households by 2010 which they have already had to acknowledge they will not reach. The trend is accelerating in the wrong direction: the number of older people in fuel poverty is likely to have more than doubled in the last 4 years alone."
	The organisation calls for a reversal of
	"last year's damaging cuts in funding for the Warm Front scheme."
	By the way, the Budget briefing for Labour MPs keeps stating, in addition to whatever is in the Budget, that there is free central heating for pensioners. There is no free central heating for pensioners. There is the Warm Front scheme, which is to be praised; however, that was cut back and people have to go through a lot of hoops to get it. Let us alter that briefing—or, better still, let us have free central heating for pensioners, if that is what we want. I do.
	Age Concern goes on:
	"Once again Council Tax Reform is notable by its absence. Council Tax has nearly doubled since 1997, whilst the Basic State Pension has only increased by 40 per cent."
	It also states:
	"The Government should act on Lyons' recommendations"
	that there should be automatic receipt of council tax benefit. That should be implemented as well.
	The briefing points out that there should be
	"a firm and steady date for the restoration of the earnings link in the state pension."
	I agree, and it should come sooner rather than later.

John Redwood: I think that the hon. Gentleman knows me well enough to be aware that that is not my view of the world. More people can be got out of poverty and into work by moving generally towards lower taxes than towards higher taxes. However, I was making a specific point on the content so far of today's Budget debate and reminding all those involved in policy formation that one cannot simply carry on with the idea that extra taxes, extra levies and extra regulatory costs can be heaped on to energy without having consequences not only on the rich but on the poor and without needing to have some kind of alternative package. If we are not careful, we just end up with massive administrative churn costs because of the imposition of a lot of administrative costs in raising the levy, the charge and the tax, and then a lot more administrative costs in giving money back to people so that they can afford the levy, the charge and the tax, and we do not achieve what we are trying to achieve. I rather like green promotion in the form of lower taxes for better behaviour. It is good that we have already heard that that worked, as it did very quickly, when we did it for unleaded petrol, which showed that people prefer an incentive to tax increases.
	It is important that people listening to our debates, as I hope that some still do, understand that we know that a very big financial crisis is under way in the world and that that crisis has moved on at breakneck speed during the course of the Budget debates. We heard a few brief remarks from the Prime Minister in his statement earlier, but we have not yet had the benefit of Treasury Ministers explaining in this House how they responded to the Bear Stearns catastrophe and the rescue that has been mounted so quickly and successfully in the United States of America, nor have we had from them proper comment on the actions being taken to co-ordinate putting liquidity into markets and seeing the market through the crisis.
	In the Budget speech, the Chancellor rightly had a paragraph or so of reference to the world financial background, explaining that it was bleak, but he also claimed, with a hint of complacency, that the UK is uniquely best placed to deal with this crisis. We should try to ensure that the Chancellor and his colleagues have thought through the gravity of the world situation in which we find ourselves and the way in which, in some circumstances, the UK is not uniquely well placed but has its own home-grown problems, which we need to take very seriously. After all, it would be foolish to be complacent given that it was the United Kingdom that had the first run on a retail bank—and, I am pleased to say, the only run; let us hope that it turns out to remain so—whereby retail depositors were so worried that they were rapidly pulling out their deposits, which is what finally triggered the intervention and action over Northern Rock. Bear Stearns is a different kind of run by a different type of investor and depositor—equally lethal but not as telegenic and not affecting people on low incomes as the Northern Rock run visibly and clearly did.
	We should ask why, over that long and difficult, and rather cold and wet summer, the British authorities were unable to take pre-emptive action of a kind that might have prevented the Northern Rock crisis developing as rapidly as it did. I am not jogging backwards—I was writing and saying this at the time. It was clear to the markets in London in August, if not July, that there was not enough money in circulation, and clear to those watching the markets that there was the potential for a financial disaster or a banking problem. I did not write down the names of the banks that were being mentioned at the time, but Northern Rock was the one that people most feared for, and it was widely rumoured in the markets. It would have been crass to mention it because the last thing that one wants to do is to play any small part in helping to undermine an important institution, crucial as Northern Rock has been to the success of the north-eastern economy and crucial as it is to all the small shareholders and depositors particularly concentrated in the Newcastle and wider north-eastern region.
	The Bank of England was placed in an extremely difficult position in August and September. The reforms of 1997 had left it ill placed to understand the nature of such a banking crisis and to be able to respond positively to it. My first recommendation is that the Chancellor urgently look again at the regulatory and banking control framework that he inherited from the 1997 reforms and that he come to this House rapidly to introduce proposals for their improvement and updating.
	A central bank is more than a regulator. A good central bank is more, even, than a hands-on referee in a free-flowing game. It is a player in the money markets that it has to supervise, and has to keep liquid, honest and successful. The problem for the Bank of England in August and September, when the money market participants could see that there were difficulties, was that, since 1997, it has lacked two important flows of information that most central banks regard as normal. First, a central bank needs to know everything that the Government are doing.
	The Government are usually one of the biggest operators in the money market—particularly a heavily borrowing Government like the present one—and the timing and nature of debt that the Government issue is crucial to the functioning of the market. In 1997, the then Chancellor nationalised the function of running the Government's debt by taking it out of the Bank of England and putting it into the Treasury. The modern Bank does not have the same minute-by-minute detailed sight of or responsibility for Government business in the market that it had prior to 1997.
	The second big problem that the Bank of England has is that prior to 1997, it was the day-by-day banking supervisor of all commercial banks, particularly the main credit-creating clearing banks that run our system. The Bank could see all of that business, and knew about it day by day, hour by hour and minute by minute. It had a close relationship with those banks—the famous Governor's eyebrows would rise wisely or angrily if anything went wrong. The Bank knew whether they were liquid enough, whether they had squared their positions early enough in the day and whether they were taking a sensible position in the markets, so the banking system worked well.
	That responsibility was lifted from the Bank and given to the Financial Services Authority, and is now handled through a tripartite arrangement with the Chancellor and the Bank of England. When the crisis struck, it was always likely that it would be more difficult to control and resolve because the principal central bank player did not have all the regular information or history and knowledge of marketplace activity that a central bank should have. That is why I warned, in an economic policy report that I wrote for the Opposition, that we had a weak structure in Britain, and that when there was a financial difficulty—I did not forecast Northern Rock, but I had something like that in mind—things would go horribly wrong because the Bank no longer had those important powers.
	The next curious matter is that just prior to the run on Northern Rock, the tripartite system clearly misread the situation very badly. Both the Chancellor of the Exchequer and the Governor of the Bank of England made fierce speeches in which they said that the banking system in Britain had made lots of mistakes by lending too much money to the wrong people, and that it had to meet the consequences of those mistakes—there would be no bail-outs. That would be a heroic thing to say at the best of times; in practice, no Government can allow a major bank to go bust in our global system because many poor and rich people would suffer badly, and there could be a systemic crash throughout the world. It was particularly odd, however, to make such statements when they must have known that they were on the verge of a difficult crisis over Northern Rock, with a possible run on the bank. They had to eat their words a matter of hours later when the run got out of control and the Chancellor said not only that he would guarantee all the deposits in Northern Rock—big though that task was—but the deposits of any bank found in a similar position, leading some to speculate who else in the markets he might have in mind. There was a worry that the run on Northern Rock would lead to a run on other institutions, which there is no need to name here. It is good that we are through that part of the crisis, that there is such a guarantee and that the tripartite system understands that it has to stand behind the banking system.
	The guarantees, offers made and the nationalisation of Northern Rock now going ahead have not solved the problem, however. We are now in what some call the second leg of it. I do not think that the problem has legs; it is a continuing problem that will take some time to resolve, and we have just had another nasty chapter in the story—or drama, if you like—with the collapse of Bear Stearns on the other side of the Atlantic.

Henry Bellingham: My right hon. Friend speaks with a great deal of expertise, but would he agree that one of the interesting features of the scenario is that the business models of Northern Rock and Bear Stearns had one item in common? The level of deposits in both were low compared with the amount of money lent out to customers and the wider market. But in the American case, the Federal Reserve intervened incredibly quickly and expeditiously, without any fuss at all, which stands in stark contrast to what happened here. In this country, the taxpayer, as my right hon. Friend rightly points out, is still heavily exposed.

John Redwood: All banking factors in the probability that some people will not be able to repay. There is not one single sub-prime business model, but lots of different business models for those making loans to people who are a bit hard up. Of course making loans to those who are hard up is more difficult than making loans to those who are rich, but there are not enough rich people, and there are not enough rich people who want to borrow, so it is necessary to lend quite a lot of money to those who are hard up. The art of banking is in deciding how much one can offer and under what conditions. If the authorities can see more of those poor people through by making sensible interest rate adjustments, I say, "Thank goodness for that", rather than, "Serves them right—let's keep the interest rates high, push more of them under and put them back into the trailer park." That is not a particularly nice thing to do.
	Will the policy be inflationary? I find it difficult to understand how people can say that the American authorities are irresponsible to cut interest rates because that will cause inflation, while at the same time they say that America is already in recession—a questionable proposition—and that it will have a hard landing in a very bad recession. If America is going into a bad recession, bankruptcy, unemployment and falling prices, not inflation will be the problem. The crash in house prices will extend to other goods and assets. I am therefore in favour of lowering interest rates in the conditions that we are considering to try to save something from the mess.
	Should more money be made available to the banking system? The answer is simple: of course it should. Whatever people think of bankers—I know that several hon. Members are not best friends with bankers or have various political causes on which to fight them—one cannot live in a modern, sophisticated economy without them. We need people who assess risk, make loans and so on. If they get it catastrophically wrong and we push them all under, we simply make our lives worse, too. There must be moderation in the response, and understanding that we must see enough banks and lending through the crisis so that, if we handle it properly, normal life can be resumed and reasonable economic growth can continue. Money must therefore be made available to the banking system.
	That brings me to my next policy recommendation to the Government. One reason why UK authorities cannot do much to make the system more liquid is that too many of the resources of the Bank of England and the Treasury have been expended on nationalising Northern Rock. The sooner the Northern Rock position is unwound, the better because our nation and our monetary authorities cannot afford to have so much tied up in a single, medium-sized—by international or even national standards—mortgage bank. Although the sum of money is small in relation to world financial markets, it is large in relation to the British taxpayer and the Government, and certainly in relation to the Bank of England.
	When the Bank of England mounted its rescue of Northern Rock, the former was only 40 per cent. of the size of the latter. It was therefore impossible for the Bank of England to mount a full rescue by itself and that is why—I presume—the Treasury got involved and there had to be proper Treasury guarantees and promises. Taking on something the size of even Northern Rock—a relatively small bank by international standards—required the whole weight of the consolidated fund of the UK and the Government's money-raising powers. The Government therefore need to accelerate the process of either running off the business or developing new business under whatever model the managers can devise so that we get the £25 billion back as quickly as possible. The Bank of England would thus have a better profile of assets and liabilities again, and more money with which to play in the markets.
	In the meantime, perhaps the Government should consider the financing of the Bank of England money market operations because I do not believe that it is playing with enough money, and it needs to have a bigger cash reserve available to keep the banking system more liquid during the difficult times. It will not be easy. I am an optimist and I believe that we can get to the other side, but it will require a more intelligent approach by the British authorities than they employed in August and September, and more weaponry in the form of lower interest rates and cash availability in the UK, just as enormous firepower is required in the United States as it, in the eye of the storm, tries to make its way through it more quickly.
	The general problem is over-indebtedness worldwide, especially in the American, British and similar economies. The good times were a period of easy credit, when the authorities on both sides of the Atlantic kept interest rates a bit lower than was sensible and either encouraged or turned a blind eye to the most massive build-up of debt under new types of debt obligation and debt structure, which we had not previously experienced. In a way, the regulators fuelled much of that. The Basel rules of capital adequacy told all sensible banks that wanted to grow quickly and increase their profits, "Do so off balance sheet." The rules encouraged—in a way, forced—them to do that. Surprise, surprise, the banks went for massive off-balance-sheet financing.
	Now, many in the Government and elsewhere have become critical and say that perhaps off balance sheet was overdone and not properly appraised and controlled. However, the Government are up to their neck in the off-balance-sheet operation because they are the biggest exponent by a mile of such financing in the UK. In the Red Book, the Government show roughly £500 billion of borrowing for the state in an economy of about £1,300 billion. The Government state that they are keeping their debt to around 40 per cent., which is the target that they set themselves.
	When I last did the sums and considered the UK in the way in which a finance director would have to examine it to stay out of jail when reporting, rather than by using the Government's method, I concluded that the British state's true indebtedness is £1.3 trillion—£1,300 billion or 100 per cent. of GDP. I reached that conclusion because of the huge unfunded pension liabilities and the large pension deficits in the state sector, the private finance initiative and public-private partnership obligations, publicly owned companies, such as Network Rail, whose debt should be part of the state sector, and now, of course, the full consolidated sum for Northern Rock. Just as Northern Rock consolidated the whole of Granite, so the Government, having acquired Northern Rock, should consolidate the whole of it.
	There is, therefore, a large debt on the state sector books, but much of it is suppressed from the general public gaze because of the accounting conventions that the Government deploy, which are so different from those that are required of the private trading sector. The Government need to start reducing their debt burden and demonstrating that they are serious about helping to unwind the debt crisis, taking a different attitude to PFI, PPP, off balance sheet and guarantees of trading companies, into which they entered so liberally in recent years. That would send a good signal and create a bit more financial capacity, which would help the state sector in all sorts of ways. It would help not least the money market, which would have a little more leeway if there are squalls ahead in the private banking sector, which need liquidity or financial instruments to be traded in open market operations.
	The Budget was the most extraordinary non-event because it dealt with moving a few hundred millions around in a £1,300 billion economy. I am happy that the elderly will get a bit more help with their fuel bills. One would expect a Secretary of State or a Minister from the relevant Department to make such a statement. One would also expect it to be a good news item. However, Budgets are about influencing the general direction, shape and size of the British economy. If a Chancellor currently wishes to make a decisive impact, the Budget must move around £7 billion, £10 billion or £15 billion. Several billions must be involved if the Chancellor is to have any impact other than a nice warm glow and a few pence in the pockets of a target group that he may wish to woo on Budget day.
	The Budget was pre-empted by the supplementary estimates that went through the House last autumn and, more recently, last Monday. From memory, the supplementaries added up to an astonishing £22,000 million of additional spending. Some of that may be good spending and a little of it may be policy change, but most is testament to the fact that the Government have lost control of their public spending. They tell us one thing on Budget day about what they will do and the balance between spending and revenue, then, towards the tail end of the year, in November and March, they set out colossal sums of money and say that, Department by Department, quango by quango, by big or little numbers, huge overruns have occurred. The figures go through automatically, without debate, yet they are far more significant—they will make an impact on the economy—than the measures mentioned in the Budget.
	I therefore recommend to the Government that, to try to get the British economy through the extremely difficult period in world finance, we need proper expenditure controls, Department by Department. We also need the side of the Treasury that the Chief Secretary leads to have much more of a grip on and daily information flow about what is happening and what is going wrong in order to intercept the overspends earlier, emphasise that they are unacceptable when it is still possible to do something about them and redouble the efforts, which are stated to be part of the Government's policy in the Budget, to root out the abundant waste, inefficiency and incompetence.
	We are now at the point where over-borrowing and indebtedness in the public finances are so gross that we need a complete staff freeze at the administrative grades. That should not apply to teachers, nurses and doctors, of course; indeed, we need to continue recruiting as many as we can afford. The general civil service and the quangocracy, however, is now extremely bloated. We need a control on numbers and we need to start slimming them down by natural wastage. I do not want to fire people—that is expensive and unpleasant, and not a nice thing to have to do—but I want to start shrinking the numbers on the public payroll quickly.
	We need pension reform for new people coming into the public sector at all levels, because the gap between public and private pension costs is extreme in favour of high-cost public sector provision. Above all, public sector pensions will be difficult to afford in the years ahead and are swelling the big deficit on any accurate and honest balance sheet, if we were ever to get one from the Government.
	We also need proper control over the use of management consultants and outside advisers of all kinds, which has got completely out of control. We need proper controls over the use of property. It would be a good idea to spend to save on energy, which is topical, given the theme of this debate. We just need professional management, Department by Department, which can start to flush out the excess billions of waste, incompetence and overrun, which the supplementary estimates pick up year after year, but which get so little debate or reporting.
	That is a series of positive proposals for a nation battling with a world financial crisis, elements of which are made in Britain, and where parts of the British predicament make responding that much more difficult. I hope that the Government will listen seriously on the need to reform their handling of money markets before there is another disaster or mess. We cannot afford another one, and it was a very expensive rescue that had to be mounted. I hope that the Government will start to tidy up Northern Rock lending as quickly as possible, because that is money that we could not afford to have outstanding, and there are easy and simple ways of getting quite a lot of that money back more quickly.
	I hope that the Government will realise that every penny in those supplementary estimates will be borrowed, because nobody came to the House and said, "We've had £22 billion of supplementary estimates, so we need £22 billion of extra taxation." We should at least be thankful for that, but there should not have been £22 billion of extra spending. We need to get to grips with that and start rolling back unnecessary spending, so that we can have the Government under some control again.
	Above all, we need the Government to understand that although there is too much borrowing and some of it has to be squeezed, that means doing something at home, in the Government account, as well as just blaming private sector banks in America. It is partly the Government, by going along with the over-borrowing, the off-balance sheet routes and the clever financing, who have helped to fuel the very crisis that they now say we can ride out more successfully.

Keith Vaz: I am delighted to take part in this debate on the Budget resolutions. I am pleased, too, to follow the right hon. Member for Wokingham (Mr. Redwood), who entered the House when I did, in 1987. We have both aged gracefully together and we have both acquired spectacles, although he has kept some of his hair. I am afraid that mine has disappeared. Perhaps he spent a little longer in government than me, and perhaps that is why he was able to survive.
	I want to praise the Chancellor, because I thought that the Budget was excellent. I am not one of those who feel that he ought to be more of a fun character. There was some press speculation after the Budget asking why he is so careful, and some people even suggested that he may be boring. However, I would much rather have a Chancellor like that than one who walks around with his face painted and a balloon attached to his lapel, ruining the Government.
	The Chancellor gave us the right Budget for the right time. This is a time of great instability, as the right hon. Gentleman correctly said. Goodness knows what is happening to the global markets or the economies of other countries. It is right that we should have a carefully measured Budget to deal with the situation that we face.
	The Chancellor was right to take the stance that he did in protecting and preserving Northern Rock. The right hon. Members for Wokingham and for Ross, Skye and Lochaber (Mr. Kennedy) will remember the closure of Bank of Credit and Commerce International, the sixth largest private bank in the world, on 1 July 1991. The then Chancellor of the Exchequer, Governor of the Bank of England and Prime Minister—I am not sure whether the right hon. Member for Wokingham was in the Cabinet at that stage—made the decision to close BCCI.
	The bank is still in liquidation, 17 years later. People lost a great deal of money, because in the aftermath of BCCI's closure, the then Prime Minister, John Major, told everybody that it was completely bankrupt and that there was no money left. However, 87 per cent. of the money has been found and the depositors have been paid back most of what they had, although many have suffered greatly because it took so long to pay them back. The bankers—the employees—have found it difficult to find employment. A repetition of the catastrophe that was the closure of BCCI was avoided by the Government. The Chancellor was right to do what he did on Northern Rock, and I am glad that he took that action.

Keith Vaz: My hon. Friend is absolutely right. In fact, he wrote to me about the case and I suggested that he write to then Secretary of State for Trade and Industry, because the insolvency service was part of the old Department. In raising BCCI, I simply point out that the Government adopted the right approach this time. Of course it has cost the taxpayer a lot of money, but the alternative would have been catastrophic.

Charles Kennedy: I thank the hon. and learned Gentleman for that helpful contribution. He makes a telling point, which many of us in our respective areas have heard expressed, not least by those who are most knowledgeable about the operation of the post office network and who know only too well how the management and leadership of the network tend to go about their business in getting the ducks lined up steadily over a number of years and proceeding with the original blueprint, albeit perhaps with a slightly extended time scale.
	To complement the point that the hon. and learned Gentleman has made, I would point out that, apart from the formal consultation that has taken place on the hit list, or the checklist, of likely casualties, other closures are already taking place, under the radar, under the guise of temporary closures. The sub-postmaster or postmistress, for whatever personal reasons it may be—retirement, or moving on to something else— gives up the tenancy and the professional contract to provide those Post Office services. That outlet then undergoes a period of temporary closure, but all too often that temporary closure slips into permanent closure. That does not appear necessarily on the radar as part of the formal consultation, but the impact in many of these communities is every bit as real because the net conclusion is identical. Therefore, not least in rural Britain, there is disappointment that the Budget is not taking more cognisance of the effects of other Government policies. Most of the measures in the Budget are certainly not seeking to ameliorate those effects.
	The third point concerns housing debt. Obviously, post-devolution, responsibility for housing policy generally in the Scottish context is transferred to Holyrood and to the Scottish Parliament, which is right and proper. However, I have been in correspondence with the Treasury because there is still an ongoing reserved aspect to that, and UK Treasury reserved powers are involved.
	I requested of the Chief Secretary to the Treasury earlier this year a meeting with colleagues from the Scottish highlands to press our particular concerns about what has happened there. They are particular to the Scottish highlands, but they are not unique in the UK by any means. Housing debt there, running at approximately £160 million, remains with the councils after tenants locally, in a highlands-wide referendum, rejected the stock transfer proposals. The difficulty is that councils in that position need to be given an option by the Treasury to help them to address the existing maintenance backlog as well as to expand affordable housing stock. At the moment, they are caught in the middle. They can do neither, because of the position they find themselves in. In an area such as our own, it is especially pressing owing to the enormous difficulties in meeting energy efficiency and fuel poverty standards—in many areas there is an absence of domestic gas supply—against a backdrop of soaring fuel bills. I hope that the Minister or the Whips who are listening will be able to encourage a positive response from the Treasury to our request. There is a genuine desire to have a serious and constructive discussion about that matter because it is a pressing one.
	Despite the constraints that I touched on at the outset of my speech, which are obvious and unavoidable at the moment, and therefore the somewhat non-event nature of quite a lot of this Budget, perhaps we shall look back in a year or two and say that the most significant aspect of the non-event Budget was that it flagged up the fact that the main event will be pushed back to 2010, rather than 2009, by which I mean a general election. However, within those constraints and against that backdrop, I think that on those three areas in particular—fuel duties, the future of post offices and the post office network, and housing debt—for large swathes of Britain and for my own part of the country in the highlands, there is much disappointment that there is nothing at all in the Budget to address them. For that reason, among others, I will oppose it in the Division Lobby tomorrow night.

Geoffrey Cox: I am very grateful. I thank my hon. Friend.
	The position that I have found myself adopting as I listened to the debate is one of considerable surprise, because there appears to be an emerging consensus. My hon. Friend the Member for East Surrey (Mr. Ainsworth) advanced the proposition that there was a lack of coherence and vision in the way the Government, and particularly the Chancellor, initiated their environmental measures. It was somewhat surprising that perhaps the majority of Labour Back Benchers agreed with my hon. Friend. In an excellent speech, the hon. Member for Nottingham, South (Alan Simpson) put his finger on the problem: what is lacking in the Budget is a sense of vision and a coherent understanding of the necessity not for a few piecemeal and fragmented measures but for a coherent policy.
	My right hon. Friend the Member for Wokingham (Mr. Redwood) said that Budgets should be about grand orientations. This Budget was not a grand orientation towards environmental policy as a driving factor in economic strategy. It was about a number of tax-raising measures that seemed to have the cloak and disguise of being green, but did not have a centre and a heart. The hon. Member for Nottingham, South put it well when he said that behind the Budget there did not seem to be any central vision.
	I have been asking myself as I have been listening to the debate why it is that the constituents whom I represent, in the largely rural areas for which I have the honour to be the Member of Parliament, should feel so cynical about the Budget that was introduced by the Chancellor last week. I think the answer is that, when they hear the Chancellor and the Secretary of State, they do not believe that the Government have a grasp of the integral elements that they will require to put through a genuinely environmental and green agenda.
	In my constituency, we are—to use the word "threatened" is perhaps to prejudge and prejudice the issue, but I will say it anyway—threatened by many applications for gigantic commercial wind turbines. The response, as the Secretary of State would expect in the area of west Devon that I represent, is almost universal hostility. But these are not unreasonable people. If they were convinced of the urgent necessity, in the interests of our country and of the world, for renewable energy to have an adverse and unwelcome impact not only on the quality of their lives as they see it but on their businesses, their bed and breakfasts, their restaurants, their tourism industry, their tranquillity—because I have the honour to represent one of the last areas of rural tranquillity in England—

Martin Horwood: My main concern today is addressing environmental issues, but I shall begin by addressing another issue that is important to some of my constituents. Cheltenham is known to like a flutter or two, and Denman's breathtaking win in Friday's Gold cup certainly cost me a bit of pocket money, as I backed Kauto Star. If you will indulge me, Mr. Deputy Speaker, I will seize this opportunity to put on the record my congratulations to Edward Gillespie and everyone involved in the festival in Cheltenham for having put on such a wonderful show this week, despite extremely challenging circumstances at the beginning of it.
	The bookies certainly looked pleased at the end of their week, despite having lost a day of racing due to the high winds—but at least they are taxed only once. Bingo clubs, like clubs at The Brewery, in my constituency, pay both VAT at 17.5 per cent. and gross profits tax of 15 per cent. They feel that this is not a level playing field. Not only was this issue not tackled in the Budget; the Chancellor took the opportunity to increase amusement machine licence duty above the rate of inflation, thereby adding to the pressure on an industry that is already suffering.
	I am not arguing that bingo clubs are on a par with post offices in their value to the community, but they do seem to be closing at a similar rate. Having visited clubs in Cheltenham, I am satisfied that they perform an important social function, particularly for some of the less well off communities and older members of our communities. I am also convinced that patrons generally bet only what they can afford. Therefore I hope that future Budgets will look more kindly on the bingo industry.
	We were promised a green Budget. That would have been timely, as the United Nations environment programme has just reported that the rate of glacier shrinkage appears to have doubled in less than a decade—a grim addition to the already worrying body of scientific evidence about climate change. Yet actually, the Chancellor was three quarters of the way through his speech before he even mentioned the environment or climate change. We then had the traditional series of re-announcements. Amazingly, there was the re-announcement of the Climate Change Bill, which I thought we all knew about, and there was more about the Bali conference and more about low-carbon buildings by 2016. At one stage, the Chancellor even seemed to be taking credit for the European emissions trading scheme.
	We had the usual complacent restatement of the Government's meeting their Kyoto targets. My hon. Friend the Member for Northavon (Steve Webb) has already pointed out quite how dangerously complacent that is, given that, according to the National Audit Office, simply using another accounting method that properly accounts for aviation and shipping shows that we have seen an increase in greenhouse gases under this Government. In fact, if we look at the figures since 2002, it does not matter which of the methodologies we use—the situation is getting worse. Of course, we all know that this great claim of the Government's to have met the Kyoto target is really only a result of the original dash for gas, which took us down below the Kyoto target many years ago.
	Then we had the announcement of the possible plastic bag tax, which I and many others have been calling for for what feels like years, but even that was not definite. We had the launch of an
	"ambitious household emissions reduction programme"—[ Official Report, 12 March 2008; Vol. 473, c. 296.],
	which I guess was an attempt to resurrect the shambles of the low-carbon building programme. On that, if not on much else, I agree with the hon. and learned Member for Torridge and West Devon (Mr. Cox), who criticised the way in which that scheme worked in practice.
	Then we had the non-announcement on vehicle excise duty, which will have no impact whatsoever until the financial year 2010-11. Among all this, strangely, there was no mention of the savage budget cuts to green projects such as the National Industrial Symbiosis Programme and the Waste and Resources Action Programme. Such cuts make it highly unlikely that business will be able to continue to improve its performance on waste reduction, in the way that it was able to do with the assistance of those two organisations.
	Of course, the Budget cuts across Departments—we cannot put the environmental bits in one box marked "DEFRA/Treasury". Other Departments are critically involved in terms of their impact on the environment. When challenged earlier, the Secretary of State dodged a question on carbon capture and storage by saying that it is a matter for the Minister for Energy. Well, it is relevant to an economic debate. As the Treasury document that accompanies the Budget, entitled "The UK economy: analysis of long-term performance and strategic challenges" makes clear, climate change, energy policy and the future performance of the UK economy are inextricably linked. That document states:
	"The Government will also seek to ensure that the UK makes the most of the potential economic benefits of the transition to a low carbon economy...It will...develop a low-carbon energy technology strategy to maximise the cost-effective potential for cutting emissions in the UK and internationally."
	However, nowhere in that document does it actually say how.
	During recent consideration in Committee of the Energy Bill, the Minister for Energy resisted a whole series of amendments that would have helped us move toward a low-carbon energy strategy. He even resisted enabling powers to introduce feed-in tariffs, which have already been mentioned today. He resisted amendments to lock carbon capture and storage into the development of a new generation of coal-fired power stations, led by Kingsnorth. He even resisted amendments that would have allowed him to broaden out the current competition launched by the Government for carbon capture and storage technology, which has been widely criticised as being too narrow and slow and has actually precipitated the truncation of an important carbon capture and storage project by BP at Peterhead. BP had already spent tens of millions of pounds of its own money on the project, which would have been on line ahead of the Government's competition project. All such amendments were rejected in Committee.
	The same Budget document to which I referred also extols the virtues of the shadow price of carbon—a measure that will be used to reflect the future cost of climate change in deciding on projects that are outside the carbon trading system. It states:
	"the Government will use the new Shadow Price of Carbon to ensure that the carbon impacts of policies—whether negative or positive—are taken into account systematically and consistently across Government".
	There is no dodging this—it was developed by DEFRA. However, this is the same shadow price of carbon that the Environmental Audit Committee recently concluded reflected serious flaws in DEFRA thinking. Our recent report on the 2007 pre-Budget report and comprehensive spending review concluded that
	"the Shadow Price of Carbon is set considerably lower than the level which Stern set for a 'business as usual' trajectory of emissions. In other words, by assuming that action will be taken to ensure that the effects of climate change will be relatively mild, the paper"—
	DEFRA's policy paper—
	"concludes that the costs of climate change are relatively low. In doing this, however, it is setting a relatively low carbon price...The risk is"—
	I hope that Ministers are following this argument—
	"that this will fail to discourage the approval of policies and projects that will lead to a growth in carbon emissions—and thus help to make it more difficult to achieve the stabilisation target that the paper assumes will be met."
	Friends of the Earth put it even more succinctly, saying that the Government
	"are using this lower figure, which has the effect of making carbon emissions go up, which means that they do not meet the targets that they are assuming are being met through the use of the shadow price...It is almost Orwellian".
	I would quibble only with the word "almost". This is surely the most perfect example ever seen of a self-defeating policy. Sure enough, it made all the difference in the decision to give the go ahead to the third runway at Heathrow. Astonishingly, the Chancellor mentioned that decision approvingly in the same breath as stating that
	"aviation must meet its environmental costs".—[ Official Report, 12 March 2008; Vol. 297, c. 473.]
	In practice, DEFRA's optimism about the future ability of nations to tackle climate change and about meeting targets has been wrongly used to create a number that makes it more likely that we will miss those targets. One could not make it up.
	Just before the Chancellor mentioned climate change for the first time in his long statement, he made another statement with serious environmental consequences. On house prices, he said:
	"The best way to improve long-term affordability and stability is to build more houses".—[ Official Report, 12 March 2008; Vol. 473, c. 295.]
	Many hon. Members would agree, but the Select Committee on Communities and Local Government, the Campaign to Protect Rural England and others have repeatedly cast doubt on whether the Government's numbers really add up to housing affordability anyway. On purely environmental grounds, however, I should like to draw the attention of the House to the growth assumptions in the Budget:
	"UK GDP growth is forecast to slow from 3 per cent in 2007 to 1&frac34; to 2&frac14; per cent in 2008, before picking up to 2&frac14; to 2&frac34; per cent in 2009 and 2&frac12; to 3 per cent in 2010."
	Only the last of those numbers is at the level of growth that housing models are using to justify imposing huge numbers of extra houses on areas such as Gloucestershire; 56,000 extra houses are now slated for that county alone. The housing model numbers for Gloucestershire assume a growth rate of 2.8 to 3.2 per cent. sustained consistently for 20 years.
	The phrase "In your dreams" springs to mind, especially in the light of the developing global economic crisis. In fact, Northern Rock and the credit crunch have demonstrated the truth of what the Communities and Local Government Committee tried to tell the Treasury two years ago: many other factors in addition to the supply of land influence house prices, including the availability of credit, interest rates and so on. That is particularly true at national level, but there are also myriad other factors locally. In my constituency of Cheltenham and the neighbouring borough of Tewkesbury, quite a large quantity of land has been released for housing over the past few decades, adding significantly to the total size of the town, yet we still experience relatively high house prices. That is the case because Cheltenham is still a wonderful place to live; it still has good schools and 98.5 per cent. employment, whereas other areas in the same travel-to-work area do not have such unaffordable housing. The housing market is very complex.
	I would be less worried if the Government were sticking to their promise to prioritise brownfield sites in this new housing development, but instead we have the acceleration and promotion of so-called growth points, which have been identified—this is certainly the case in Gloucestershire—in green-belt areas around already relatively affluent towns such as Cheltenham, despite the fact that other areas need and want such development more. The Budget did nothing to prioritise brownfield sites over greenfield where the new housing is needed.

Bill Wiggin: It is a pleasure to follow the hon. Member for Cheltenham (Martin Horwood), who was right to say that the dash for gas was the reason why the Government have hit their Kyoto targets. Apart from the two Front-Bench speeches, my hon. and learned Friend the Member for Torridge and West Devon (Mr. Cox) and the hon. Member for Nottingham, South (Alan Simpson) both made excellent speeches, and it was a pleasure to listen to them.
	One of the most important tests of whether a Government are acting in an environmentally friendly manner and taking climate change seriously is the way in which they are using their fiscal measures to encourage greener behaviour and developments. On that test, the Government have failed miserably. On transport, we heard in Question Time last week that the Prime Minister appeared keen to alter the carbon reduction target to 80 per cent. by 2050. A significant part of the problem that needs to be tackled is the emissions from transport. They account for about 29 per cent. of the United Kingdom's total carbon emissions.
	When it comes to promoting greener forms of transportation, however, the Government are strangling development rather than promoting it. Much play has been made of the so-called showroom tax—a one-year only discourager that would, as it happens, target my constituents who need four-wheel-drive vehicles, as well as large-engined sports cars as are favoured by footballers and such—and the apparent first-year exemption for vehicle excise duty for cars emitting less than 130 g per kilometre, which is the EU standard. Just as the 2p income tax reduction was exposed last year as a tax con because of the removal of the 10p tax rate, those changes will hit families hard and result in a stealthy tax gain for the Government.
	Pretending to be green and using the so-called green taxes to try to fill the massive Government debt black hole will ultimately be damaging to the economy and the environment. Moreover, when it comes to promoting existing greener fuels, the Government are penalising those who are doing the right thing and making the choices that promote sustainable transport use.
	In fact, my complaint against Labour's Mayor and his new congestion charge is that it removes the incentive for alternative-fuel vehicles. That is a great loss, especially for families who need to be able to use cars but cannot bear to use traditional fuel because of its carbon pollution: they now have no choice at all. I am grateful to the Secretary of State for his offer, but sadly there are no family cars emitting less than 120 g per kilometre.
	I recently had the privilege of test driving the Vectrix electric scooter, or motorbike. It does not require petrol. It just needs to be topped up with electricity from a socket, although few public electric recharging points are available nationwide. Despite the cleaner technology, the Budget contained no commitments that would encourage the growth of this sector, drive demand and help to make this type of product more affordable. The scooter currently costs just under £6,000, which is about three times more than a similarly performing petrol equivalent, and not much less than a Harley Davidson. We need to do more to encourage that type of technology.
	I declare an interest as an owner of a vehicle powered by liquefied petroleum gas. The fuel duty on that greener, cleaner and more efficient fuel has spiralled in recent years, and the proposed increase in the Budget—to come into effect from October—will give little comfort to owners of LPG vehicles or the industry. In 2005, the duty on LPG stood at 9p per kilogramme. The 2006 Budget increased that by 3.21p, or 36 per cent., to 12.21p. Last year's Budget increased that by another 4.28p to 16.49p—a rise of 35 per cent. And this year's Budget points to a further increase of 4.28p, which is a rise of 26 per cent. That means that owners of LPG vehicles will, from October, have to pay 20.77p per kilogramme, which is 11.77p more than just three years ago, or an increase of 130 per cent. Similarly, the duty paid on compressed natural gas will soar by 52 per cent. as a result of this Budget, from 9p per kilogramme in 2005 to 13.7p.
	Those duty increases are significantly higher in amount and proportion than the 2p increase on petrol, diesel, and bioethanol. There are more than 115,000 owners of LPG vehicles in the UK and the Government will penalise them by more than doubling the amount of fuel duty that they have to pay. That is not a particularly sustainable approach to take.
	The Government's policy appears to be to increase taxes on an area of green growth, instead of encouraging and promoting its expansion. That would also appear to go against the spirit and recommendations of the King review "Of Low Carbon Cars", which was published on the same day as the Budget. Professor King highlighted four key challenges for reducing carbon dioxide from road transport. These included reducing CO2 through fuel efficiency and enabling an expansion of low carbon fuels. LPG and compressed natural gas fulfil those functions. The King review comments that there should be an:
	"increased use of alternative fossil fuels such as LPG and CNG which can both offer small but significant life-cycle CO2 savings over petrol and diesel. Cars capable of using LPG or CNG currently represent less than 1 per cent of the total car stock but there is scope to expand their use."
	The Chancellor in his speech on Wednesday said:
	"Professor King found that simply by switching to the cleanest cars on offer, motorists could save 25 per cent. of their fuel costs."—[ Official Report, 12 March 2008; Vol. 473, c. 297.]
	But by trying to cash in on the growth in LPG and CNG use, that 25 per cent. saving may not be as great, and the Government run the risk of failing to promote the cleaner fuels that more people need to use to achieve significant reductions in the carbon footprint of transport. The Government have their hands around the necks of LPG and CNG users, and are getting ready to throttle them. This was not a green Budget, but a green stealth tax Budget.
	Turning to the issue of biofuel and its environmental potential, the Budget has again failed address the inherent weaknesses in Government policy towards this fuel. In spite of widespread criticism, the Government are pursuing the renewable transport fuel obligation to increase biofuel use. But, because the sustainability criteria have not been produced—if indeed they are developed at all—the relentless growth in biofuels may continue in an irresponsible way. We have seen the push for biofuels, particularly in the USA, leading to significant increases in food prices. In the last year alone, the price of corn has risen by 31 per cent., of soya by 87 per cent. and of wheat by 130 per cent. That has a knock-on effect right the way down the food chain. The consumer is hit with higher prices, and the rise in prices is also forcing domestic farmers into financial difficulties. Pig farmers are being especially squeezed, with the cost of feed doubling in the last year alone. If the industry does collapse, cheaper imports, reared—this is very important—to lower animal welfare standards, will flood the domestic market adding to shoppers' carbon footprints.
	The problems associated with the unsustainable growth of biofuel extend beyond food prices in the farming sector. The demand for palm oil for use in biofuels as well as in food and cosmetics is leading to the destruction of the rainforests of Borneo and Sumatra. As much as 10 million hectares of habitat could be lost, and that is having a devastating impact on orang-utan populations, which might be as low as 7,000 in Sumatra. They could face extinction within five years.
	I must take this opportunity to pay tribute to the roundtable on sustainable palm oil, which is a fantastic initiative designed to ensure that the palm oil that we buy is from sustainable sources that also live up to the standards on issues such as human rights and exploitation that we would expect from our major retailers. However, despite my warm words, I think that they need to move faster. I am warned that it might be only five years before we lose our sustainable population of orang-utans in the wild. It may take that much time to get sustainable palm oil on to our shop shelves. I fear that if palm oil comes into our fuel tanks without awareness among the general public, an explosion in the demand for that palm oil would quickly lead to the loss of those great apes. Sime Darby, a major palm oil producer that seeks to ensure that it can deliver sustainable palm oil, has invited me to visit Malaysia and Borneo to see what is being done to preserve the habitats of those great apes. I also congratulate those firms who have already changed their buying policies to include palm oil from sustainable sources.
	We hear many pronouncements about globalisation and the Budget in terms of the financial markets and economic impacts, but the Budget also has an important role to play in contributing to the sustainability of world resources, rather than their over-exploitation. I note the review into the wider environmental and economic impacts that has been announced, but that piece of work should have commenced earlier. Moreover, it remains unclear whether sustainability standards and targets will be in place or when they will become applicable.
	Back in October, during the debate in Committee on the Renewable Transport Fuel Obligations Order 2007, the Under-Secretary of State for Transport, the hon. Member for Poplar and Canning Town (Jim Fitzpatrick), stated that the date for sustainability targets was 2011 and that that was just an aspiration. The Budget has thus far failed to elucidate any further on that quasi-commitment. We need to be clear that biofuels can be a positive step forward in the fight against climate change if they are sourced in a responsible and sustainable manner.
	It is not just in the area of fuel duty and biofuels where a more sensitive and targeted approach could have been beneficial to the environment and consumers. As chairman of the all-party cider group, and someone who represents a constituency in England's cider-producing heartland, I have followed with interest and sadness the rise in duty on cider. It is disappointing to see that the Government have decided to clobber all cider drinkers and producers when they could have taken a more targeted approach.
	I am sure that all right hon. and hon. Members are familiar with the problems of binge drinking. We all see the disruption and antisocial behaviour that a minority of reckless and irresponsible drinkers cause in our town centres. However, instead of using the Budget to take action against the minority who cause the problems and raising duties on the higher strength alcoholic products, which are among the cheapest and most affordable, the Government are hitting everyone. The Opposition have put forward proposals on alcohol taxes that would take effective action against the irresponsible minority and make higher strength ciders and other similar alcoholic drinks more costly to buy, but would not impact on the majority of the country's 37 million responsible drinkers who consume medium and low-strength alcoholic beverages.
	The Government might not have realised it, but their approach to alcohol taxation, which is to penalise all types of cider and mass-scale cider producers, such as Bulmers and Westons in my constituency, has a negative impact on the environment. Cider is a domestic success story with more than 1 billion pints now sold each year. That success through rising demand has lead to widespread investment in sustainable environmental practices. Cider producers take great pride in ensuring that their chemical, water and energy uses are kept to a minimum.
	In Herefordshire, Bulmers is a lead partner in delivering the county's biodiversity action plan. Two million cider apple trees have been planted in more than 5,000 acres of land in recent years. Green, environmental and sustainable practices are awarded through industry-led initiatives such as the golden apple awards. Instead of using the Budget to support medium and lower-strength ciders, and recognising the benefit that cider producers bring to our environment, the Government are treating a British success story like a piggy-bank that they intend to raid.

Justine Greening: My hon. Friend raises a good point. Not everyone is able to change to a lower-carbon car. Even if they pick a car that is best in class, it may still be found higher up the band because it is a particular sort of model.
	I was about to move on to plastic bags. We saw yet another build-up—it was in the papers that we were going to have a plastic bag tax. What happens when we get to Budget day? We "may" have a plastic bag policy or tax. The irony is that it is very much, "Do as I say, not as I do" from the Government. It turns out that last year, the Government bought 1.2 million plastic bags to help raise the profile of various Whitehall bodies at a cost of about £90,000. I wonder whether any of them had the words, "Act on CO2" printed on them. Perhaps we will never know.
	I cannot end my speech without mentioning zero-carbon buildings. That initiative was much vaunted, and the way in which it would kick-start the market was trumpeted. The Government's aspiration—I assume I can call it that because they may no longer be able to describe it as a full pledge—is for all new domestic homes to be zero-carbon by 2016, which is only eight years away.
	The Budget's move to extend the stamp duty relief on zero-carbon homes to zero-carbon flats comes only six months after the original regulations, which specifically excluded flats and maisonettes, passed through Parliament. When the Government introduced those regulations, Ministers told me that the relief would kick-start the market. My hon. Friend the Member for East Surrey (Mr. Ainsworth) told us that, at the end of 2007, six homes had qualified. I can update the figure, which has risen. I am sure that he will be pleased to hear that, at the end of February, nine homes had qualified.  [Interruption.] Labour Members say that that is a 30 per cent. increase, but the bad news is that the rate is reducing because, before the final quarter of last year, the Government were getting two a month, but now the figure is just under two—I admit that February was a short month.
	I can only imagine the party in the Treasury when the tenth zero-carbon home qualifies for stamp duty relief. Doubtless, there will be a cake with 10 little candles and officials will run in and say, "Minister, Minister, Minister, at last we're into double figures, so only 99.9999999"—hon. Members get the picture—"per cent. of the new build market to go."
	Page 105 of the Red Book deals with the reasons for the current position. It refers to the Government having a plan to finish defining a zero-carbon home by the end of the year. It is amazing that any homes managed to qualify, given that the definition has not been established. Perhaps we should congratulate the Government on getting as many as nine homes through when they have not managed to work out what constitutes a zero-carbon home. Nevertheless, we will see how they get on.
	The Government are not content with new domestic build—the policy is being extended to Government buildings, public buildings and, by 2019, all non-domestic buildings. I am sure that the building industry will be keen to find out what zero-carbon means by the end of the year when the Government have finally managed to devise a definition.
	Whereas the Government perceive green taxes as stealth taxes, the Conservative approach is more balanced. We perceive green taxes as replacement taxes. When there are tax rises in one sphere, we need to ensure that they are offset by tax reductions elsewhere. The Government do not understand that concept. For the Prime Minister and the Chancellor, green tax is not about changing behaviour; it is simply another way to raise money.
	Friends of the Earth director, Tony Juniper, said:
	"We urgently need real political leadership on this issue",
	but it is clear that we have none. The threat to the environment exists now. We need firm action, decisive policies and innovative thinking to make a difference now. In the Budget, the Chancellor gave us nothing but half measures, token gestures and a total lack of vision and direction. Is that what he means by stability? He should have called it inaction. The Secretary of State for Environment, Food and Rural Affairs told us that the Budget demonstrates how seriously the Government take the environment. Quite. They do not take it seriously at all.

Angela Eagle: I am disappointed, Mr. Deputy Speaker, as I thought we were going to hear the Conservative Front-Bench position on airport expansion, but there we are. It serves me right for thinking that there might be an answer to that question.

Angela Eagle: We still have no answer, Mr. Deputy Speaker, to whether Conservative Front Benchers are in favour or against airport expansion at Heathrow. Individual MPs may have particular views, but we are talking about Conservative Front Benchers here. Their environment people go off and tell everyone how they are against airport expansion, while their economic people go off and say that they are in favour of it. They hope that no one will notice the inconsistency. They tell people what they think they want to hear in order to be popular, in the hope that those people will not actually talk to each other, compare notes and realise that Conservative Front-Bench policy is a complete mess.
	The hon. Member for East Surrey mentioned green ISAs in passing during a speech that seemed to declare a policy-free zone for most of the time. How much is that policy going to cost? How much will it cost in higher rate tax relief to have extra green ISAs? How much will it cost in total tax relief? Once again, Mr. Deputy Speaker, answer was there none.
	The hon. Member for East Surrey talked about the purchasing of what he called "foreign indulgences", by which he meant that the UK should somehow not be allowed to purchase emissions from abroad to meet any post-Kyoto targets. Is he against carbon trading? Does he believe that, somehow, 1 tonne of carbon abated over London is worth more than 1 tonne of carbon abated over India? As we are moving towards a lower-carbon economy and battling the threat of climate change, does he feel that that is best done by not allowing any trading between the advanced economies and the economies of the developing world? If people believe that, we will never succeed in the battle that we must have against the threat of catastrophic climate change.
	Labour Members believe that social justice and economic success go arm in arm. The Budget allows us to continue to invest in our public services. Investment here has trebled as a share of national income since 1997. We have replaced the shabby and dilapidated infrastructure that we inherited from the Conservative party with one that we can all be proud of in the public service. We continue to invest in our education system and the training of our work force so that we can compete effectively in the developing global economy and ensure that no child is left behind and every adult can make the most of their talent.
	Even in these difficult times, my right hon. Friend the Chancellor has been able to find money to make further advances in the battle to eradicate child poverty. The Budget will help to lift a further 250,000 children out of poverty and the spending review will continue the funding of Sure Start children's centres, which are transforming the life chances of a generation of less-advantaged kids. What a contrast with the Conservative party, which is still intent on slamming shut the door of opportunity by destroying Sure Start.
	My right hon. Friend was also able to consolidate the gains that pensioners have made under Labour. For the first time in our history, the Government have broken the link between poverty and old age, getting 2 million pensioners out of poverty, and 9 million households will benefit from the additional payment of £50 for the over-60s and £100 for the over-80s this winter. From April, all bus travel will be free for pensioners.
	This Budget will steer us through uncertain times and equip our country for the challenges ahead. I commend it to the House.
	Debate adjourned.— [Mr. David.]
	 Debate to be resumed tomorrow.

John Robertson: I thank my hon. Friend for that intervention. I will touch on that matter at the end of my speech. I do not necessarily come to the same conclusion, but I do come to a conclusion, and I hope that the Minister will comment on my suggestion.
	By that measure, the Government have a long way to go simply to get back to the stage we were at four years ago when 2 million homes were in fuel poverty. Roughly 600,000 of those were pensioners and I believe that, on the figures I have outlined, a far greater number will be in fuel poverty next winter.
	I have no doubt that the Minister will rightly want to point out that the winter fuel allowance is not the only tool the Government use to tackle fuel poverty. Warm Deal, for instance, or Warm Front for those living in England, has helped more than 1 million homes at a cost of £1.4 billion. As he will be aware, however, that is available to more numerous groups than the winter fuel payment, such as those on certain income-related benefits or disability living allowance. Therefore, it is not directly comparable to the allowance figures. I ask the Minister, if he does cite Warm Deal as helping in that regard, how many of those it has helped are pensioners.
	In answer to a written question from the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) on the proportion of a pensioner's bills which the payment would cover, the Minister said in  Hansard on 6 December 2007, at column 1512W, that pensioners' incomes had grown by 29 per cent. in real terms between 1996 and 2005. If we take the state pension from 2001 and 2003, the more significant dates in examining the recent Budget increase, they have increased by 21 and 25 per cent. respectively, so only 3 and 11 per cent. in real terms. That, once again, means that there is a large deficit in the rate at which pensioners' incomes have increased, even with the winter fuel payment, in comparison with the 50 per cent. rise in energy bills.
	As with the Warm Deal scheme, I should point out that any comparison between the state pension and the allowance will be inexact because entitlements to them are not co-extensive. Moreover, with food prices—another staple for pensioners—having increased by 6 per cent. this year, energy bills are not the only burgeoning demand on their finances.
	The trend in fuel poverty has been going in the wrong direction for the past few years and because the payment has remained static, for the next winter pensioners will be far worse off than seven years ago. If we are serious about eradicating fuel poverty, there is clearly a need for the winter fuel allowance to be directly linked to fuel prices by some mechanism. The tragedy of the situation is summed up by the fact that we collate a statistic entitled "the excess winter death figure", which stood at just under 24,000 for 2006. If the Government can afford to double the allowance for inheritance tax, I humbly submit that we can find the money to prevent pensioners from freezing in their own home.
	The final issue I wish to discuss is entitlement to the allowance. All people over 60 are entitled to receive the payment and need specifically to claim to do so. The need to claim the allowance—rather than, for instance, it being an addition to the state pension or being paid directly to energy companies—significantly reduces the chance of the targeted group receiving it. From my surgeries, I know that perceived entitlement to financial help does not go hand in hand with actual entitlement to it. In particular, many pensioners I meet do not want to claim for assistance, believing that they can get by without it and should make do with what they have, or feeling that it is charity. In this context, Help the Aged estimates that about £4.5 billion in various benefits goes unclaimed by pensioners each year. All the calculations I have outlined are predicated on the assumption that there is full take-up of the allowance, so the situation is likely to be even worse than I fear.
	Perhaps the rationale behind requiring a claim to be made is that that will deter those who are perfectly well off from applying for the payment simply to supplement their finances. If that is the case, will the Minister assure me that the relevant segment of the unclaimed £4.5 billion comes from the over-60s who are not in need of the allowance failing to claim it, rather than those in fuel poverty and in dire need of assistance towards their bills? Has any assessment of this been made?
	This issue also highlights the fact that the winter fuel payment is indiscriminate, given that all those over 60, regardless of whether they are still in work and regardless of their resources or incomes, are entitled to receive the payment. It is bizarre that the payment is used as a blanket income supplement across the board for over-60s alone, when many vulnerable groups such as children and the disabled are equally susceptible to fuel poverty and receive no assistance at all from the allowance.

Mike O'Brien: We can actually get to every pensioner; the problem is getting those pensioners whom we can get to to recognise that if they are on a low income, they can apply for further benefits. In the past 18 months, we have written in some instances up to four times to people whom we think may be entitled to claim the pension credit, help with their council tax and perhaps housing benefit in respect of their social housing rent. Many of them are not responding. We know their addresses and can write to pensioners, but it is getting the response that is sometimes the problem. We are trying to encourage working with partner organisations and the Pension Service to get more pensioners to claim the benefits. Tackling broad poverty is crucial, but, as my hon. Friend says, we must go further.
	 It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.
	 Motion made, and Question proposed, That this House do now adjourn.— [Mr. David.]

David Taylor: Does my hon. Friend and parliamentary neighbour agree with those observers who remark that it is easier for a smaller number—now five—major energy companies to form an unofficial cartel to hold prices at higher levels than they should be, or to push them to levels that the market does not dictate? Would not that be worth investigating? Many observers think that it should be investigated.

Mike O'Brien: Ofgem is there precisely to ensure that such a situation does not arise. The aim of setting up a regulator such as Ofgem is so that it can ensure that the market is operating properly and the interests of the consumer are paid due attention. My hon. Friend suggests that the consumer comes off worst, but Ofgem—an independent regulator proud of its independence—is aware that, especially at a time of fast rising fuel prices, we need to ensure that energy companies are responding to the concerns of their customers and operating the best competitive market. We rely to some extent on Ofgem to carry out its regulatory and policing activities to ensure that the consumer is protected.

John Robertson: To back up the point made by my hon. Friend the Member for North-West Leicestershire (David Taylor), the difference in price between the dearest and cheapest energy suppliers is only 1.3 per cent. Is that likely to happen if we are in a competitive market?